assessing the effectiveness of the kimberley process in
TRANSCRIPT
University of the Witwatersrand: Department of International Relations
Assessing the effectiveness of the Kimberley Process in Zimbabwe and the Democratic Republic of Congo
A Research Report Submitted to the Faculty of Humanities by:
Desmond Munemo Student No: 678117
In partial fulfillment of the requirements for obtaining the degree of Master of Arts in International Relations
Under the supervision of: Dr Vishwas Satgar
July 2013
Abstract
Prior to the establishment of the Kimberley Process in 2003, the global diamond industry,
particularly in Africa, was characterised by secrecy, lawlessness, arms trade, money
laundering and armed conflict. The system of diamond regulation was ineffective. The
Angolan and Sierra Leonean civil wars of 1975 and 1991, respectively, alerted the
international community of the role of conflict diamonds in financing rebel movements which
were responsible for the outbreak of civil wars in Africa. As a result action had to be taken
and it took a combined effort of national governments, non-governmental organizations
(NGOs) and the diamond industry to create a global diamond regulatory system known as the
Kimberley Process Certification Scheme (KPCS). The objective of this scheme is to break the
link between diamonds and conflict. As such, it traces the flow of diamonds from mines to
diamond markets through diamond certification process. The effectiveness of the scheme has
since been questioned in the case of the Zimbabwean diamonds and the Democratic Republic
of Congo where diamond smuggling and trade in conflict diamonds is rife. Diamond
situations in these countries have raised questions pertaining to the effectiveness of the
Kimberley Process. The K.P. is nevertheless credited for bringing optimism to a global
diamond industry which was faced with multi-faceted problems.
Declaration
I declare that this research report is my own unaided work. It is submitted for the degree of MA in
International Relations at the University of the Witwatersrand, Johannesburg. It has not been
submitted before for any other degree or examination in any other university.
D. MUNEMO
Signature
29 JULY 2013
To my ever supportive father, Ishmael Munemo.
Acknowledgements
I owe my deepest gratitude to my supervisor Dr Vishwas Satgar. Without his continuous
optimism concerning this work, enthusiasm, encouragement and support this study would
hardly have been completed. I also express my warmest gratitude to Professor Gilbert
Khadiagala, Head of the International Relations Department, and Dr Lord Mawuko-Yeguvah
who assisted me in crafting my research topic.
I am deeply grateful to Farai Maguwu (Director of Zimbabwe’s Center for Natural Resource
Governance), Shamiso Mtisi (Activist and Head of the Research at the Zimbabwe Environment
Law Association) and Melania Chiponda (Senior Official at Chiadzwa Community
Development Trust) for their assistance during the process of writing this report.
I also owe a great debt of gratitude to my supportive friends and family, Gari Muzamhindo,
Bernard Tavengwa, Collin Kudare, the Chinaka and Goredema families, without your
motivation and psychological support this research report would not have been a success.
ABBREVIATIONS
AA – Action Aid
ACR – African Consolidation Resources
AFEC – Anhui Foreign Economic Construction
AI – Amnesty International
BBC – British Broadcasting Corporation
BCHW – Basel Convention on Hazardous Waste
CAR – Central African Republic
CCDT – Chiadzwa Community Development Trust
CDR – Centre for Research and Development
CEEC – Centre for Evaluation, Expert Analysis and Certification of Precious Minerals
CIA – Central Intelligence Agency
CITIES – Convention on International Trade In Endangered Species
CNDP – National Congress for the Defence of the People
CSO – Civil Society Organisation
DHSAR – Diamond and Human Security Annual Review
DHSP – Diamond and Human Security Project
DMC – Diamond Mining Corporation
D.R.C. – Democratic Republic of Congo
EITI – Extractive Industries Transparency Initiative
EU – European Union
FARDC – Armed Forces of the Democratic Republic of Congo
FDLR – Democratic Forces for the Liberation of Rwanda
GW – Global Witness
GDOSL – Gold and Diamond Office of Sierra Leone
HRW – Human Rights Watch
IPE – International Political Economy
IDMA – International Diamond Manufacturers Association
IDRI – Indian Directorate of Revenue Intelligence
JWP – Joint Work Plan
K.P. – Kimberley Process
KPCS – Kimberley Process Certification Scheme
KPPR – Kimberley Process Peer Review
KPRMT – Kimberley Process Review Mission Team
M23 – March 23 Movement
MD – Mbada Diamonds
MIBA – Société Minière de Bakwanga
MNC – Multinational Company
MR – Marange Resources
MRC – Marange Resources Company
NGO – Nongovernmental Organisation
OI – Oxfam International
PAC – Partnership Africa Canada
PD – Pure Diam
RUF – Revolutionary United Front
SAESSCAM – Small-scale Mining Technical Assistance and Training Service
SAIIA – South African Institute of International Affairs
UAE – United Arab Emirates
UJ – University of Johannesburg
UK – United Kingdom
UN – United Nations
UNCHPR – United Nations Charter of Human and People’s Rights
UNGA – United Nations General Assembly
UNITA – National Union for the Total Independence of Angola
UNODC – United Nations Office for Drugs and Crime
UNSC – United Nations Security Council
USD – United States Dollar
UW – University of the Witwatersrand
VAT – Value Added Tax
WDC – World Diamond Council
WFDB – World Federation of Diamond Bourses
ZANU-PF – Zimbabwe African National Union-Patriotic Front
ZDI – Zimbabwe Defence Industries
ZMDC – Zimbabwe Mining Development Corporation
ZNDC – Zimbabwe National Defence College
ZRB – Zimbabwe Reserve Bank
CONTENTS
Chapter 1: Introduction 1
1.1. Introduction 1
Chapter 2: Theoretical Framework and Literature Review 6
2.1. Theoretical Framework 6
2.2. Literature Review 14
2.2.1. Conflict Diamonds 14
2.2.2. History and Significance of Diamonds 15
2.2.3. The Resource Curse 18
2.2.4. Lootable and Non-Lootable Resources 19
Chapter 3: Research Methodology 22
3.1. Research Methodology 22
3.1.1. Research Questions 22
3.1.2. Aim and rationale 23
3.1.3. Research methods 24
3.1.4. Challenges and Limitations of Study 26
Chapter 4: Social Forces Approach to the International Political Economy of Conflict Diamonds in Africa
4.1. International Political Economy of Conflict Diamonds in Africa 28
4.1.1. Demand and Supply of Conflict Diamonds in post-Cold War Era 29
4.2. Neoliberalism and the Illegal Trade of Diamonds 35
4.3. Armed Conflicts as Money-Making Ploy 46
4.4. Money Laundering in Africa: Corporate Social Providers 37
4.5. The Diamond Industry: Monopoly, Corporate and Consumer Issues 38
Chapter 5: The Kimberley Process Certification Scheme 40
5.1. Diamond Industry prior to the Kimberley Process 40
5.2. Establishment of the Kimberley Process Certification Scheme 42
5.3. The Kimberley Process Ideology 43
5.4. Structural Analysis of the Kimberley Process 45
5.5. Key Challenges facing the Kimberley Process 47
5.5.1. Self-Regulatory Industry 47
5.5.2. Weak Internal Diamond System Control 48
5.5.3. Excessive Respect for State Sovereignty 49
5.5.4. Definition of Conflict Diamonds 49
5.5.5. Lack of Central Authority 51
5.6. Kimberley Process Positive Contributions 51
5.6.1. Strict implementation of minimum requirements 52
5.6.2. Reduction of Conflict Diamonds from Africa 53
Chapter 6: Kimberley Process in Zimbabwe and the Democratic Republic of Congo
6.1. Diamond Mining in Zimbabwe 54
6.1.1. Background 56
6.2. Marange Diamonds: The Politics of Domination or Illusion? 57
6.2.1. Allocation of Mining Concessions 57
6.2.2. Military Control and Human Rights Issues 61
6.2.3. Diamond Smuggling and Corruption 65
6.3. Beneficiaries of the Zimbabwean Diamonds 68
6.4. Kimberley Process’ response to Marange Diamonds 71
7.1. Diamond Mining in the Democratic Republic of Congo 75
7.1.1. Background 75
7.2. Diamonds in the Democratic Republic of Congo 77
7.2.1. Diamond Smuggling and the Trade in Conflict Diamonds 80
7.2.2. Rebel Groups and Artisanal Mining 82
7.2.3. Diamond Tracing and the Reliability of National Statistics 86
7.3. Beneficiaries of the Democratic Republic of Congo Diamonds 90
7.4. Kimberley Process’ response to the DRC diamonds 92
Chapter 7: Summary and Conclusions 95
8.1. Summary and Conclusions 95
8.2. Case Study Summaries 95
8.2.1. Zimbabwe 95
8.2.2. The Democratic Republic of Congo 97
8.3. Revisiting Theory 98
Bibliography 99
Appendix
The Kimberley Process Certification Scheme
1
Chapter 1
Introduction
1.1. Introduction
The period marking the end of the Cold War in 1991 ushered in a new era, which saw many
African countries relying more on their natural resources, diaspora remittances and
humanitarian aid as their major sources of funds. This resulted from ‘superpowers’
withdrawing their financial support to African countries, as well as the triumph of capitalism
over communism as the dominant global ideology. Since then, Africa’s development has not
been particularly impressive, as the continent had to go through a series of armed conflicts,
which deepened the crisis. Pan-Africanists argue however that the internal challenges of
armed conflict, corruption, bad governance and dictatorship facing Africa today emanated in
Europe from the curse inflicted upon the continent at the Berlin Conference of 1884-1885,
where the so-called ‘Iron Chancellor’ of Germany Otto Von Bismarck, led the unsympathetic
partition of Africa.1 The effects of this infamous meeting are seen today in the artificial
boundaries demarcating Africa, which are partly to blame for the proliferation of deadly
conflicts on the continent.2
It is common knowledge that mining has immense potential to contribute towards economic
development by creating employment, facilitating foreign exchange, and bolstering social
infrastructure development and the fiscus.3 However, the history of Africa’s natural resource
1 Adebajo, A.: The Curse of Berlin: Africa after the Cold War, University of Kwazulu‐Natal Press, South Africa, 2010, p. 32. 2 Ibid 3 Mtisi, S., Dhliwayo, M, and Makore, G.: Extractive Industries Policy and Legal Handbook: Analysis of the Key Issues in Zimbabwe’s Mining Sector, Zimbabwe Environmental Law Association (ZELA), Harare, 2011, (ZELA), p. 14.
2
extraction has been a disappointment.4 To avoid repetition of such a history, efforts were
made through the establishment of international monitoring regimes, such as the Kimberley
Process, whose main aim has been to encourage countries and actors involved in the mining
and trade of diamonds to practice sustainable mining and trading patterns that uphold critical
standards of transparency, accountability, corporate social responsibility, and environmental
justice.
The contemporary view on the diamond industry or diamonds in general was largely
influenced by the deadly turn of events that occurred during the civil war in Sierra Leone
between 1991 and 2002, which left most areas of the country devastated.5 Likewise, the
diamond war of Angola from 1975 to 2002, alerted the international community to the link
between diamonds and the outbreak of armed conflict.6 However, most recently, it was the
2006 Hollywood movie, Blood Diamond, which reminded the world of the problem of
conflict diamonds and the effort made by the diamond regulatory system, known as the
Kimberley Process, in tracing the movement of diamonds from mines to the formal diamond
retail markets, and stopping the senseless killing of civilians by rebels in diamond producing
regions.
Now that the effects of (conflict) diamonds on the African continent are more widely known,
this research report aims to assess the extent to which the Kimberley Process (K.P.) has
managed to minimize further outbreaks of diamond-linked conflict and end the trade in illicit
diamonds. This task will be performed by means of unravelling the political economy of
conflict diamonds in Africa, and providing special attention to the two countries of
Zimbabwe and the Democratic Republic of Congo (D.R.C.), from the period between 2003
and 2012. Guided by neo-Gramscian theory, the research report identifies actors making up
the Kimberley Process, the countries targeted by the regime, and ultimately the extent to
which it is able to realise its objectives.
4 Collier, P. “The Political Economy of Natural Resources” in Social Research, Vol. 77, No. 4, Winter 2010, p. 1105. 5 Silverstein, K, “Diamonds of Death” in Levy, A.V. (ed.): Diamonds and Conflict: Problems and Solutions, Novinka Books, New York, 2003, p. 65. 6 Collier, P: Op. Cit p. 1111.
3
Breaking the link between diamonds and the outbreak of civil war is the major priority of
Kimberley Process, however it has become increasingly evident that the effects attributable to
the circulation of conflict diamonds do not always manifest in civil war or armed conflict, but
rather that they can take different forms, such as human rights violations, coordinated
corruption, and depriving the citizenry of sustainable forms of development. The
Zimbabwean case vividly demonstrates some of the flaws within the Kimberley Process,
especially with regards to the violation of human rights. In the Democratic Republic of
Congo, the effectiveness of the Kimberley Process is currently under the spotlight since
government legitimacy and capability is in question. On one hand, the DRC is recognized by
some as a functional state run by a legitimate government, while on the other, it is perceived
as a failed state. By admitting the D.R.C. into the Kimberley Process, the scheme
automatically acknowledged the legitimacy of the government, although its capability to
govern in real terms is actually very weak. Similarly, in other cases such as the Ivory Coast,
the Central African Republic, Venezuela and Guyana the Kimberley Process Certification
Scheme (KPCS) has been seriously put to the test as the long-running domestic and regional
problems linked to conflict diamonds continue to persist. The scheme is however credited for
its relative success in the diamond-related conflicts in Sierra Leone and Angola.
By acknowledging a government as legitimate, the Kimberley Process concludes that it
shares the same objectives, however, the two selected case studies will demonstrate the need
for the Process to reconsider the nature of its engagement with member states and participants
such that an effective approach, which could address all possible issues facing the diamond
industry, is adopted. Such introspection is important in order to realign the scheme to its
objectives, making sure it remains relevant to its principle mandate.
The study brings to light the important role performed by the Kimberley Process, of alerting
the world to how the shadow economy of illicit diamonds is linked to rebel movements and
partly responsible for the outbreak of civil wars in Africa. Since its inception in 2003, the
Kimberley Process has been putting pressure on the diamond industry and national
governments to adopt diamond control systems that promote transparency and accountability.
Had it not been the introduction of the Kimberley Process Certification Scheme, perhaps the
diamond trade would have continued operating in secrecy, supporting rebel movements.
4
This research report is divided into seven chapters. Chapter 1 outlines the background of
Africa’s armed conflicts and natural resources, it provides a brief introduction to the study
and an overview on the issues surrounding the Kimberley Process in Zimbabwe, and the
Democratic Republic of Congo. Chapter 2 focuses on the theoretical framework and a review
of relevant literature. The chapter unpacks the neo-Gramscian concepts of social forces,
domination, ideology and historic bloc. These concepts assist in identifying the social forces
driving the K.P., Zimbabwean diamonds, D.R.C. diamonds, and above all, the forces driving
the international diamond trade. As for the historic bloc, this concept is crucial in analysing
and explaining how the current status quo of the diamond situation in Zimbabwe and the
D.R.C. came about. This concept is examined through historicizing the two cases. The
concept of domination explains how the ‘fundamental group’ in the two cases are able to
control the diamond sectors in their respective countries through the use of force as opposed
to consent. Identifying the ideology of the K.P. assists in analysing and critiquing its
approach towards the question of conflict diamonds. The chapter also situates these concepts
in the larger framework of the political economy of conflict diamonds in Africa. Thereafter,
the chapter reviews the literature on issues of conflict diamonds, the resource curse, and
lootable and non-lootable resources in Africa.
Chapter 3 lays out the methodology of the study. It states the guiding research questions, the
aim and rationale behind the study and the challenges and limitations encountered by the
researcher. The major sources of data and reasons for selecting such methods are explained in
this chapter. Chapter 4 describes and analyses the dynamics of the social forces driving the
international political economy of conflict diamonds in Africa. It pays attention to the social
forces underpinning the illegal diamond industry and brings to light the link between the
illegal diamond trade, money laundering and arms deals. Although it remains a challenge to
understand exactly how the diamond industry is run internally, the chapter dedicates a section
to a discussion of the monopoly of the industry and how it is influenced by the current
neoliberal global order, among other factors of relevance.
Chapter 5 discusses the emergence of the Kimberley Process, its ideology, strengths,
weaknesses and the challenges it faces. The chapter discusses the ideological framework
driving the Kimberley Process and it identifies key actors and non-actors shaping the
5
diamond industry. Chapter 6 profiles the case studies of Zimbabwe and the Democratic
Republic of Congo. It analyses the impact of diamond mining in these countries and the role
played by the Kimberley Process thus far. In doing so, the chapter evaluates the effectiveness
of the Kimberley Process, whether indeed the scheme is meeting its objectives.
Chapter 7 is the last section of the report. It wraps up the findings of the study and takes a
conclusive position regarding the effectiveness of the Kimberley Process in Zimbabwe and
the D.R.C. It concludes that the Kimberley Process was initially established to tackle
problems in the trade during the conflicts over diamonds in Sierra Leone and Angola, but
since these eras came to a close over a decade ago, there is urgent need for the scheme to
restructure its mandate and devise relevant mechanisms that focus precisely on current issues
in the international mining and trade of diamonds.
The research report concludes that the problem solving approach adopted by the Kimberley
Process does not provide the necessary latitude to make a comprehensive analysis of the
political economy of the current illegal diamond trade, hence it struggles with attempts to
create a conflict diamond-free industry. The chapter highlights the need for the K.P. to
accommodate issues of human rights, environmental rights and socio-economic and cultural
rights within its mandate, such that diamond producing countries can be brought to book for
the continuous abuses of human rights.
6
Chapter 2
Theoretical Framework and Literature Review
2.1. Theoretical Framework
In assessing the effectiveness of the Kimberley Process and understanding how the illicit
trade in conflict diamonds operates, this study is informed by neo-Gramscian theory. Antonio
Gramsci’s work has since become of importance especially in understanding the dynamics of
international political economy.7 The Italian school has enjoyed wide academic coverage
through the works of contemporary theorist Robert W. Cox.8 Cox rejects the notion of a
grand theory, arguing that a theory is meant for a certain audience and purpose and its
standpoint comes from a position in political and social time and space.9 Cox’s theory is
understood to be an updated version of historical materialism, which pays special attention to
“the role of critical theory, social forces, hegemony and world order”.10
Neo-Gramscians are adamant that the world can only be interpreted from a nation or social
class perspective of dominance or subordination, from rising or declining power, from
immobility or present crisis, from past experience, and from hopes and expectations of the
future.11 They find fault in the manner of problem-solving theories such as realism that
interpret the world order, questioning how theorists readily accept the world in which they
theorise and showing that they fail to question the general pattern of institutions and
relationships, that is, how the ideological order came about and whose interest it serves.12
7 Baylis, J. and Smith, S. and Owens, P: The Globalization of World Politics, Oxford Press University, United States, 2011, p. 137. 8 Ibid 9 Cox, R.W. “Social forces, states and world orders: beyond international relations theory” in Journal of International Studies: Millennium, Vol. 10, No. 2, 1981, p. 444. 10 Jorgensen, K.E.: International Relations Theory: A New Introduction, Palgrave Macmillan, New York, 2010, p. 168. 11 Cox, R.W: Op. Cit. p. 444. 12 Ibid. p. 445.
7
Cox opposes the neo-realist perspective, which recognizes the state in international relations
as a ‘billiard ball’, rather he argues that a state is permeable and should be viewed as an
entity.13 His theory put more emphasis on the need to historically contextualize theory.14
Cox perceives the world order to be made up of “combinations of ethnic/religious and social
forces which have conflicting interests and aspirations.”15 As such, he argues that there is
more to production than the physical production of goods.16 The production of physical goods
comes along with knowledge, ideologies, morality, social relations, and institutions.17
The selected theory explains phenomena by questioning the way in which “existing social or
world orders have come into being, how norms, institutions, or social practices emerge, and
what forces may have the emancipatory potential to change or transform the prevailing
order”.18 It assists in understanding how power is constituted within a mode of production, as
well as which class and non-class forces utilize this power. How is the political economy of
conflict diamonds constituted in Africa? Which social forces inform this? What ideas are
implicated? What interests are realized?
Neo-Gramscians define social forces, both at national and global level, as potential catalysts
or factors capable of transforming forms of state and world order.19 These forces have a
tendency to occur in a way that enables them to suggest specific goals and solutions that
advances their own interests.20 Social forces vary, in some instances they might be driven by
the need to acquire as much surplus or revenue as possible, or to gain power to dictate other
13 Leysens, A.: The Critical Theory of Robert Cox: Fugitive or Guru? Palgrave Macmillan, New York, 2008, p. 17. 14 Ibid 15 Schouten, P. “Robert Cox on World Orders, Historical Change, and the Purpose of Theory in International Relations”, in Theory Talks, No. 37, 12 March 2010, p. 3. 16 Bedirhanoglu, P. “The State in Neoliberal Globalization” in Ayers, A.J. (ed): Gramsci, Political Economy, And International Relations Theory: Modern Princes and Naked Emperors, Palgrave Macmillan, New York, 2008, p. 94. 17 Ibid 18 Morton, A.D, “Social Forces in the Struggle over Hegemony: neo‐Gramsci Perspectives in International Political Economy”, Rethinking Marxism, Vol. 15, No. 2, April 2003, p. 154 19 Leysens, A: Op. Cit. p. 2. 20 Migdal, J.S. “The State in Society: An Approach to struggle for domination” in Migdal, J.S. and Kohli, A. and Shue, V. (eds): State Power and Social Forces, Cambridge University Press, United States of America, 1994, p. 21.
8
people’s behaviour.21 To guarantee their interests, social forces might form alliances and
coalitions such that they are able to impose their beliefs and practices on others.22
In explaining how social forces are linked to forms of states and world order, Cox emphasizes
the need to abandon the neo-realist approach of interpreting the state and society as isolated
entities; rather he argues that the two are a single unit, which should be referred to as “state-
society complex”.23
In the social sciences, the state has commonly been mistaken as an organic, undifferentiated
actor separated from the rest of the society.24 The influence of the state upon society is only
understood by first identifying the different components of the state along with the social
forces making up the state hierarchy, as well as the reasons behind that.25 Identifying social
forces making up the state enables one to know how decision-making is undertaken by state
offices and forces that influence the outcome of its decisions.26 Although the state is
characterised at once by its international standing as well as its pervasiveness in matters of
consequence for a society, it is of course possible that it may strive for acquiescence rather
than consent.27
It goes without saying too that social forces are not confined within state borders, where at
times their influence overflows into neighbouring or other states.28 At times, locally based
petty capitalists or dominant social groups influence the running of big international
corporations, big-nation-based enterprises and industrial groups.29 This demonstrates the
power and level of influence of social forces.
21 Ibid 22 Ibid 23 Leysens, A: Op. Cit. pp. 38‐39. 24 Migdal, J.S: Op. Cit. p. 17. 25 Ibid 26 Ibid 27 Ibid. p. 18. 28 Bedirhanoglu, P: Op. Cit p. 92. 29 Cox, R.: Production, Power, and World Order: Social Forces in the Making of History, Columbia University Press, New York, 1987, p. 358.
9
Conventional international relations theories such as realism, fall short in their analysis of the
nature of states and global events.30 They place more focus on the economic and military
capabilities of states, whereas neo-Gramscian theory question how the existing world order,
norms and institutions came about and whether the current order is likely to be challenged.31
Such analyses by neo-Gramscian theory provide a comprehensive approach capable of
assisting in understanding of how the world order came into being and how issues of
international relations are linked. This goes beyond what realism offers in explaining the
international political economy.
The concept of historic bloc is closely associated to social forces as it traces the historical
formation of social forces and the different political and socio-economic conditions which
fostered their emergence. The concept explains phenomena through historicizing and
analysing the interaction between socio-economic relations (base) and political and cultural
practices (superstructure).32 It focuses on classes, institutions, and ideas.33 Cox identifies this
concept as particularly useful, especially “to studies that are constrained by time and
space”.34 This report employs this concept to try and understand how the different status quos
in the three countries came about, especially prior to the introduction of the Kimberley
Process.
In the selected case studies of Zimbabwe and the D.R.C., the political economy approach is
employed to identify the social forces involved in these two respective diamond sectors. The
approach is also used in understanding the ideology of the K.P. and how that ideology has
been embraced by member states in each of these two cases. The theory assists in identifying
social forces driving the illicit diamond trade. Identification of these players assist in
understanding the dynamics surrounding the diamond industry and the Kimberley Process,
that is, the various interests of national governments, non-governmental organizations
30 Bieler, A. and Morton, D. “A critical theory route to hegemony, world order and historical change: neo‐Gramscian perspective in International Relations” in Capital & Class, Vol. 28. No. 85, p. 86. 31 Ibid 32 Baylis, J. and Smith, S. and Owens, P: Op. Cit. p. 138. 33 Bedirhanoglu, P: Op. Cit p. 93. 34 Leysens, A: Op. Cit. p. 13.
10
(NGOs) and the diamond industry.35 The approach permits one to consider different
frameworks in identifying the origins of social forces and how their interests are safeguarded
at a national and global level.
In Zimbabwe, the social forces making up the diamond sector are the business elite and
political elite, military forces and diamond smugglers.36 The recent involvement by the
Chinese and Russian investors in the Zimbabwe diamond sector requires special attention,
since the two major foreign investors have the potential to further monopolize the diamond
sector and advance their own interests at the expense of the local people.37 The persistence
and determination shown by Zimbabwean non-governmental organizations deserves
recognition. Considering the repressive political system under which they work, it is
remarkable that they continue to put pressure on both the government of Zimbabwe and the
Kimberley Process to take action particularly on issues of human, environmental and cultural
rights.38
The Zimbabwe diamond sector is characterised by a politics of domination, since it lacks
transparency, accountability and consent from other state and non-state actors.39 The
diamonds mined in the country are controlled by the political elite, the military and the
police, with the destination of the diamond revenue remaining unknown.40 Political
domination in this case enables the corrupt elite to syphon unlimited amounts of diamonds
from the system and profit from these in a way that remains unaccounted for. The situation is
35 Global Witness (A), Kimberley Process, http://www.globalwitness.org/campaigns/conflict/conflict‐diamonds/kimberley‐process, 16 June 2012. 36 The business elite include Zimbabwean business men, Chinese and Russian investors. The political elite group is made up of politicians from President Robert Mugabe’s political party, ZANU‐PF, who also control the diamond sector. See: Chiketo, B., Marange Diamond fields in Zimbabwe: Zanu‐PF’s enrichment project? http://www.newstimeafrica.com/archives/30369, Accessed: 13 January 2013. 37 Bell, A., Russia joins China’s fight for Zim diamond control, http://www.swradioafrica.com/news160611/russia160611.htm, Accessed: 16 June 2012. 38 New Zimbabwe, NGOs step‐up anti‐Marange fight, http://www.newzimbabwe.com/news‐5942‐NGOs%20step‐up%20anti‐Marange%20fight/news.aspx, Accessed: 30 August 2012. 39 Environmental Justice Trade and Liabilities Project, The Story of Zimbabwe’s Marange diamonds: Pollution, Politics, Power, http://www.theafricareport.com/news‐analysis/the‐story‐of‐zimbabwes‐marange‐diamonds‐pollution‐politics‐power.html, Accessed: 12 December 2012. 40 Ibid
11
further exacerbated by the collapse of governance in Zimbabwe since 2000 after the infamous
land grabs incited at the time by the government of Zimbabwe.41
Meanwhile, in the Democratic Republic of Congo, the social forces influencing the local
diamond sector are the political elite; rebel movements (M23, CNDP, FDLR) and national
forces (FARDC); external actors (Rwanda); illegal diamond diggers; and diamond buyers
(middle men). These actors play a part in shaping the D.R.C. diamond sector, and identifying
and analysing them is crucial to determining a more complete picture of diamond trade in the
D.R.C.42
Lack of government control in some parts of the country permits rebel movements and
neighbouring countries to illegally exploit the country’s mineral resources.43 In the D.R.C.,
domination by the central government is partly met by resistance from rebels, hence the
political instability in the Eastern part of the country.
Similarly, diamonds in other countries such as the Ivory Coast are controlled by the military
and by rebels (viz. Forces Nouvelles de Cote d’Ivoire), a situation that has caught the
attention of the Kimberley Process and international community at large.44 Key social forces
shaping Africa’s diamond industry are usually rebel’s activities, government forces, diamond
diggers and smugglers.
In explaining the political systems and forms of governance in the selected case studies, the
study employs the neo-Gramscian concept of domination, which is the opposite of
41 Ibid 42 Leavitt, C. and Mitchell, C. G., Companion Curriculum To: Blood Diamond, Amnesty International and USA Human Rights Education Program, http://www.amnestyusa.org/sites/default/files/bd_curriculumguide_0.pdf, Accessed: 14 May 2012, p. 26. 43 Ibid 44 Coulibaly, L. and Bavier, J., Ivory Coast wants blood diamond ban lifted, http://www.reuters.com/article/2012/06/03/us‐un‐ivorycoast‐diamonds‐idUSBRE85209O20120603, Accessed: 3 June 2012.
12
hegemony.45 Domination is when the elite rule the masses without consent, and dominate
them as opposed to leading them.46 In such a situation, the elite are driven by their zeal to
advance their own interests at the expense of the broader interests of the people of their
country.47 The theory of hegemony by Antonio Gramsci asserts that “hegemony and
dictatorship are mutually dependent phenomena”.48 It therefore means that where there is
domination, there is dictatorship.49 For hegemony to take effect, there is need for the
governed to unreservedly acknowledge their rulers as legitimate, with such consent being
influenced by the diffusion and popularisation amongst society of the worldview of the
dominant class.50
The study argues that the governments of Zimbabwe and the D.R.C. rule the masses by force
rather than by consent, hence they exploit their political and economic power in controlling
natural wealth and enriching themselves at the expense of the development agenda. Such a
model of governance, neo-Gramscians would argue, thrives through fraud and deception.51
At a global level, ideas, institutions and material capabilities has been used by powerful
social forces in shaping the global order – particularly the Washington Consensus
institutions.52 Institutionalization of ideas through organs such as the United Nations is still
the practice of the day, with only powerful social forces having the latitude to review and
restructure global policy through advanced material capabilities.53 In the case of the K.P., one
could argue that the forces driving the regime might not necessarily be advancing the
ideology of the K.P., since there is a conflict of interest between the various actors making up
the scheme. The diamond industry, for instance, was initially interested in merely protecting
45 Ransome, P: Antonio Gramsci: A New Introduction, Harvester Wheatsheaf, London, 1992, p. 6 46 Bates, T.R. “Gramsci and the Theory of Hegemony” in Journal of the History of Ideas, Vol. 36, No. 2, April – June 1975, p. 353. 47 Ibid. p. 352. 48 Ibid. p. 354. 49 Ibid 50 Ibid. p. 352. 51 Augelli, E, and Murphy, C.N, “Gramsci and International relations: a general perspective with examples from recent US policy towards the Third World” in Gill, S. (ed): Gramsci, Historical Materialism and International Relations, Cambridge University Press, Cambridge 1994, p. 128. 52 International Relations and Security Network (ISN), Power – A Natural Phenomenon or a Form of Hegemony, International Relations and Security Network, http://www.isn.ethz.ch/isn/Current‐Affairs/Special‐Feature/Detail?lng=en&id=140406&contextid774=140406&contextid775=140396&tabid=140396, Accessed: 2 April 2012. 53 Ibid
13
its own business interests rather than taking action against the trade in conflict diamonds,
which was partly responsible for the outbreak of several armed conflicts in Africa.54 It was
only after an intensive NGO-led campaign against conflict diamonds that the industry
eventually took part in the structuring of an international diamond regulatory system.55
This research report has chosen a ‘critical’ as opposed to ‘problem solving’ theory, mainly
because the former has more leverage in unpacking the question of how a prevailing order
came about in the countries in question and in whose interest it functions. A ‘problem
solving’ theory is ahistorical, and interprets the contemporary parameters of the system “as
being a mirror of the past and of the future”.56 An ahistorical theory is characterised by
normative bias, where a form of bias works in favour of those who impose and maintain a
particular order, whereas critical theory aims to figure out the factors that gave rise to the
current system or status quo and how it developed. 57 Critical theory goes further to argue that
an alternative order is only achievable when one remains non-utopian, desists from
improbable alternatives, and moves away from the idea of a permanent existing order.58
As convincing as Cox’s ideas are, they are challenged by Marxists who argue that his failure
to acknowledge the concept of “mode of production” leads his analysis into becoming a
simple pluralist description of the events under study.59 The methodology of Cox’s model has
been questioned and described as ambiguous, since it fails to produce “a methodologically
structured and systematic account of the nature of capitalist accumulation, and why it is
unstable and prone to systematic changes”.60
54 Lapp, A., Precious Stones and Deadly Consequences, Association of Young Journalists and Writers, http://ayjw.org/print_articles.php?id=343854, Accessed: 16 April 2012. 55 Ibid. 56 Leysens, A.: Op. Cit, p. 39. 57 Ibid. p. 40. 58 Ibid. p. 41. 59 Budd, A. Globalising Gramsci, http://www.isj.org.uk/index.php4?id=712&issue=129, Accessed: 04 June 2012. 60 Bedirhanoglu, P: Op. Cit. p. 113.
14
2.2. Literature Review
2.2.1. Conflict diamonds
The terminology ‘conflict diamond’ is understood and interpreted differently by various
actors. The K.P., together with the United Nations Security Council (UNSC), define conflict
diamonds as “diamonds that originate from areas controlled by forces or factions opposed to
legitimate governments, and which are used to fund military action in opposition to those
governments or in contravention of the decisions of the Security Council”.61 The crafting of
this definition was influenced by the diamond civil wars of Angola, the D.R.C. and Sierra
Leone. The framework and context of this definition has become somewhat unsuitable to the
contemporary issues facing the diamond industry. The diamond industry has transformed
over the years, and issues of conflict diamonds are no longer limited to rebel movements
using diamond funds to topple legitimate governments. Some legitimate governments are
using diamond money to buy arms illegally, to violate human rights, and to launder money.
The current conflict diamond cases of Zimbabwe, the Central African Republic (CAR), the
D.R.C. and Guinea reveal the shortcomings of such a definition, revealing how it fails to
withstand the challenge of accounting for the contemporary troubles within the diamond
industry.
De Beers, on the other hand, defines the same commodity as “diamonds that are mined or
stolen to provide funds for armed rebellion against legitimate, internationally recognized
governments”.62 One notices that De Beers’ interpretation of conflict diamonds implies
intentionality and agency, which can easily be denied.63 In other words, voiced in these terms,
De Beers’ perception is that as long as a diamond is not directly mined for the purposes of
funding conflict it is to be considered conflict-free, regardless of where it is mined.64
Unfortunately, such an understanding of conflict diamonds could be deemed misleading, as
61 United Nations, Conflict Diamonds: Sanctions and War, http://www.un.org/peace/africa/Diamond.html, Accessed: 22 September 2012. 62 Francis, D.J., Conflict Diamonds and the Analysis of African Conflicts: A Framework for Conflict Prevention, http://archive.niza.nl/docs/200212101524088396.pdf, Accessed: 22 September 2012. 63 Reddy, S.G, and Henry, D, and Oppong, J. R. “Conflict, Diamonds and the Political Economy of Instability in Africa” in African Geographical Review, Vol. 24, No. 1, December 2005, p. 52. 64 Ibid
15
the definition fails to acknowledge all possible scenarios where conflict diamonds might be
involved.
The above definitions pinpoint the weaknesses and variances in the understanding of conflict
diamonds. An acceptable definition of conflict diamonds should not be limited to a specific
area, but rather should cover the entire world where conflict or war is funded by diamonds,
and the application of the term should include actors such as governments and peacekeepers
involved in the diamond war economy.65 There are indeed cases where the interests of states,
the political elite and mining companies converge and lead them to channel revenue from
mineral resources to undermine basic freedoms as well as civil and political rights.66 As such,
a concrete definition of conflict diamonds should be rich in context, such that it covers a
much greater proportion of possible scenarios that might be associated with conflict
diamonds. One would argue that Ian Smillie’s definition is more sound and more relevant, as
compared to the official definition. Smillie defines conflict diamonds as “diamonds that have
been stolen, smuggled or used for the purposes of tax evasion and money laundering”.67
The above discussion goes some way to revealing the debates surrounding the term conflict
diamond, however, for the purposes of this research report, the term will be used in its
broader sense in terms of the multidimensional approach that considers the role of both state
and non-state actors, that is, government representatives and rebel groups alike.
2.2.2. History and Significance of Diamonds
Over the past years, the issue of conflict diamonds has since caught the attention of
international actors.68 The link between diamonds and conflict can only be understood by first
65 Kabia, J.M. “Greed or Grievance?: Diamonds, Rent‐Seeking and the Civil War in Sierra Leone (1991‐2002” in Omeje, K. (ed): Extractive Economies and Conflicts in the Global South, Ashgate Publishing Limited, Hampshire, 2008, p. 96. 66 Mtisi, S., Dhliwayo, M, and Makore, G: Op. Cit. p. 16. 67 Smillie, I. Comparative Case Study 1. The Kimberley Process Certification Scheme for Rough Diamonds. VERIFOR Case Study, http://www.pacweb.org/Documents/diamonds_KP/kimberley‐process.pdf, Published: October 2005. 68 Taylor, I. “Botswana and the Conflict Diamonds Campaign: “Diamonds for Develeopment” vs. “Diamonds for Despair” in Ngowi, A.B and Feldman, C. and Matshediso, B. and Mathiba, M. and Ssegawa, J. (eds.): Challenges
16
acquiring relevant knowledge on diamonds such as their geological makeup, location, means
of extraction, and the operational nature of the diamond industry.69 By definition, a diamond
is “a natural mineral consisting essentially of pure crystallized carbon in the isometric system,
with a hardness on the Mohs (scratch) scale of 10, a specific gravity of approximately 3.52
and a refractive index of 2.42.”70 In an apparent contradiction of their symbolic meaning as
an emblem of love and affection, these precious stones have been responsible for funding and
fuelling brutal conflicts all over Africa.71
Geologists state that diamonds were formed more than a billion years ago in the Earth’s
mantle, which is located over 150 kilometres below the earth’s surface.72 Magma, found in
the mantle containing the element carbon, was heated beyond 1,200°C, and due to the intense
heat and pressure casued by this, the carbon was turned into crystals.73 As the magma moved
upward towards the Earth’s surface, these crystals (diamonds) moved upward too, and over
time the magma hardened into igneous rock.74 Some diamonds remained stuck in the rock
and were ferried to the surface, whereas others remained within the kimberlite pipes.75
Diamond deposits fall into two categories, namely primary and secondary deposits.76 Those
which are found in pipes or rock columns extending from beneath the earth’s crust where the
Facing the Minerals Industry in Developing Countries, Debswana Diamond Company and the University of Botswana, Gaborone, 2002, p. 36. 69 Tamm, I.J, Diamonds in Peace and War: Severing the Conflict‐Diamonds Connection. World Peace Foundation – WPF Program on Intrastate Conflict. Carr Centre for Human Rights Policy. Report 30. Massachusetts, 2002, p. 3. 70 Kimberley Process (A), Kimberley Process Certification Scheme Core Document, Kimberley Process, http://www.kimberleyprocess.com/web/kimberley‐process/core‐documents?p_p_id=110_INSTANCE_ekPGITK4zTkz&p_p_lifecycle=0&p_p_state=normal&p_p_mode=view&p_p_col_id=column‐2&p_p_col_count=1&_110_INSTANCE_ekPGITK4zTkz_struts_action=%2Fdocument_library_display%2Fview_file_entry&_110_INSTANCE_ekPGITK4zTkz_redirect=http%3A%2F%2Fwww.kimberleyprocess.com%2Fweb%2Fkimberley‐process%2Fcore‐documents%3Fp_p_id%3D110_INSTANCE_ekPGITK4zTkz%26p_p_lifecycle%3D0%26p_p_state%3Dnormal%26p_p_mode%3Dview%26p_p_col_id%3Dcolumn‐2%26p_p_col_count%3D1&_110_INSTANCE_ekPGITK4zTkz_fileEntryId=20203, Accessed: 16 August, 2012, p. 3. 71 Kabia, J.M: Op. Cit. p. 95. 72 Edwards, R. and Dickie, L.: Diamonds and Gemstones, Crabtree Publishing Company, New York, 2004, p. 12. 73 Ibid 74 Ibid 75 Ibid 76 Edwards, R. and Dickie, L: Op. Cit. p. 11.
17
diamonds formed are known as primary deposits, with those located further afield referred to
as secondary deposits.77 Diamonds are popular for their natural hardness, which allows them
to last longer than any other gemstones on Earth.78
Aside from the symbolic associations with eternity that these precious stones possess,79 they
have widespread industrial uses as well, such as cutting, grinding, drilling and polishing
procedures.80 In April 2001, Janine Roberts confirmed before the United States Congress the
important role that diamonds have played in the work of almost all of their previous
administrations.81 Throughout history, great kings and queens, respected men and women,
nobles and common men alike have been tempted, inspired and awed by the uniqueness of
diamonds.82 In the 1600s and 1700s, it was widely held that diamonds could conquer
enemies, guarantee good health, prosperity and happiness and shield against any form of
danger.83
The value of a diamond is determined by carat, colour, cut and clarity.84 Additional value can
also be added by taking into consideration more than 14,000 commercial assortments.85 The
most valuable diamonds are the ones that are colourless and pure carbon.86 This kind of
diamond is at times referred to as an ‘ice’ diamond due to its colourless crystal clear nature as
well as that it is cold to the touch.87
77 Ibid 78 Ibid. p. 6. 79 Diamonds, rubies, sapphires, and emeralds are known as precious stones because they are rare, beautiful and durable, they cannot be scratched easily. See Edwards, R. and Dickie, L.: Diamonds and Gemstones, Crabtree Publishing Company, New York, 2004, p. 6. 80 Geology.com., Diaomond, http://geology.com/minerals/diamond.shtml, Accessed: 16 August 2012. 81 Crawford‐Browne, T: Op. Cit. p. 56. 82 Edwards, R. and Dickie, L: Op. Cit. p. 5. 83 Ibid 84 The Diamond High Council: Progress Report ‐ Conflict Diamonds: analysis, actions solutions, Belgian Diamond Industry, http://www.conflictdiamonds.com/pages/Interface/reportframe.html, Accessed: 15 August 2012. 85 Loc cit. 86 Edwards, R. and Dickie, L: Op. Cit. p. 6. 87 Ibid. p. 6.
18
The first diamond was discovered in India about four thousand years ago.88 It was named
‘vajra’, meaning ‘thunderbolt’.89 It was stolen from India by Jean Tavernier, a French
merchant, who later sold it to King Louis XIV of France.90 Like the majority of today’s
conflict diamonds, even this very first diamond is said to have caused immense “financial
ruin, death, and insanity”, to the extent that people of ancient India believed that it was
cursed.91 Today, seventy-three percent of the world’s diamond reserves are found in Africa,
but regardless of such massive mineral wealth, Africa is known for its widespread poverty.92
Because of this poverty, there are those who firmly believe that Africa’s diamonds are a curse
rather than a blessing to its people, since they have been such a large cause of conflict on the
continent.
2.2.3. The Resource Curse Hypothesis
Although it was Alan Gelb93 who initially coined the expression ‘resource curse’, many other
scholars have since tried to analyze and explain its meaning.94 Hazel McFerson defines it as
the failure of resource-rich nations to achieve economic development, and she points to the
factors of bad governance, patrimonialism, lack of the rule of law, accountability,
transparency and the absence of citizenry participation as causes of this resource curse.95
Mcferson argues that the same factors lead to the rise of the “Big Man” syndrome, which she
defines as the tendency by African leaders to promote a patrimonial state that fails to advance
issues of national economic interests.96
88 Crawford‐Browne, T Op. Cit. p. 28. 89 Edwards, R. and Dickie, L: Op. Cit. p. 6. 90 Ibid. p. 4. 91 Ibid 92 Ibid. p. 53‐54. 93 Gelb, A.: Oil Windfalls: Blessing or Curse? Oxford University, New York, 1988. 94 Hamilton, K., and Ruta, G. “From Curse to Blessing: Natural Resources and Institutional Quality”, Environmental Matters, Issues 24. http://siteresources.worldbank.org/INTENVMAT/64199955‐1162240805462/21125342/9FromCurse.pdf, Accessed: 16 June 2012, p. 24. 95 McFerson, H.M. “Extractive industries and African democracy: can the ‘resource curse’ be exorcised?” in International Studies Perspectives, Vol. 11, 2010, pp. 342‐344. 96 Ibid
19
The resource curse is characterized by a long-running decrease in exchange rate inflation and
product prices, accompanied by government short-sightedness in implementing relevant
economic and political policies.97
Although there are debates surrounding the accuracy of the resource curse hypothesis and the
lack of a single theory capable of explaining the term completely, scholars place emphasis on
the need for proper management of natural resources, if sustainable development is to be
achieved.98 Good management is mostly required in developing countries where the bulk of
the country’s national budget is acquired from the trade in natural resources.99 It is
unfortunate that in most natural resource-rich developing countries, natural wealth is
exploited by the elite in safeguarding their political interests, which later results in a factional
state and civil war.100
There are numerous cases in Africa where mineral resources such as diamonds have been
used in financing civil wars and purchasing arms, resulting in the death of countless
people.101 The effects of conflict diamonds, in particular, have proven to be extensive and
long-lasting in Africa and have left many African economies in a terrible state.102 In
explaining why natural resources at times lead to conflict, William Reno points to the rise of
warlordism, shadow states, and a host of economic factors.103 He argues that the outbreak of
civil war is extremely high in countries were economic resources are embezzled by warlords
through the system of patronage.104 He provides examples of warlords such as Charles Taylor
of Liberia, Foday Sankoh of Sierra Leone, and Jonas Savimbi of Angola, who were
responsible for the outbreak of the civil wars in Liberia, Sierra Leone and Angola,
respectively.105
97 Hamilton, K., and Ruta, G: Op. Cit p. 24. 98 Ibid 99 Ibid 100 Ibid 101 Mtisi, S., Dhliwayo, M, and Makore, G: Op. Cit. p. 16. 102 Reddy, S.G, and Henry, D, and Oppong, J. R: Op. Cit. p. 52. 103 Reno, W. “Shadow States and the Political Economy of Civil Wars” in Berdal, M. and Malone, D. (eds): Greed and Grievances: Economic Agendas in Civil Wars, Lynne Rienner Publishers, United States, 2000, pp. 45‐46. 104 Ibid 105 Ibid
20
2.2.4. Lootable and Non-Lootable Resources
Natural resources are classified into two groups, namely lootable resources and non-lootable
resources.106 Diamonds, likewise, are divided into two major types of deposits, kimberlite and
alluvial (surface scattering) diamonds.107 Kimberlite diamonds fall into the category of non-
lootable resources due to their geological location, which requires ample capital and hi-tech
machinery for extraction.108 Alluvial diamonds on the other hand are found very close to the
earth’s surface and requires very little capital and manual labour to mine; hence they are
classified as lootable resources.109
In most cases, the political elite monopolize the control of non-lootable resources due to their
ability to acquire capital and technological resources for mineral extraction.110 However, such
is not the case with lootable resources, and the political elite struggle to impose the same
monopoly, mainly because small-scale artisanal miners do not require capital or complex
technology to extract lootable resources.111
To be in total control of lootable resources, a state ought to invest significantly in its security
sector, such that illegal artisanal miners do not intrude into the mineral fields.112 Generally,
states find it challenging to maintain law and order where lootable resources are involved,
especially if a state has weak institutions and poor systems of governance.113
Cases of civil war, state failure and political instability are more likely to arise in weak states
endowed with lootable resources, than in countries where non-lootable resources drive the
106 Snyder, R. and Bhavnani, R. “Diamonds, Blood, and Taxes: A Revenue‐Centered Framework for Explaining Political Order”, in Journal of Conflict Resolution, Vol. 49, No. 4, August 2005, p. 568. 107 Passas, N. and Jones, K. “Commodities and Terrorist Financing: Focus on Diamonds”, in European Journal on Criminal Policy and Research, Vol. 12, No. 1, 2006, p. 3. 108 Snyder, R. and Bhavnani, R. Op. Cit. p. 568. 109 Ibid 110 Ibid 111 Ibid. p. 569. 112 Ibid 113 Ibid
21
economy of the state.114 However, there is no guarantee that a state whose economy is
sustained by non-lootable resources will always achieve stability, due to the fact that those in
high political office have a tendency to embezzle public funds and transfer them to foreign
bank accounts at the expense of national economic development.115 In the same vein, states
that receive very low revenue from lootable resources might achieve both economic and
political stability, depending on the quality of leadership and institutions.116 Although the link
between natural resources and state stability depends on a range of factors, political will and
institutional effectiveness stand out as the most vital factors in evading conflict, and the
resource curse.117
114 Ibid 115 Ibid. p. 570. 116 Ibid 117 Ibid. pp. 570‐572.
22
Chapter 3
Research Methodology
3.1. Research Methodology
This chapter aims to explicate the reason why certain research methods were selected over
others in this study. The chapter begins by stating the key questions guiding the research.
These questions are crucial in their role of keeping the researcher and the reader alike
cognisant of the key objectives of the research. Thereafter, the chapter shifts its attention to
the rationale of the research, explaining why the research was done, and noting its benefit to
the scholarly arena at large. Then it focuses on research methods, explaining the type of
research methods that were used and not used, and the reasons behind such choices. The last
part of the chapter focuses on the challenges and limitations that the researcher encountered
and the actions that were taken in minimizing the effects of such challenges.
3.1.1. Research questions
1. - How effective has the Kimberley Process ideology been in helping to curtail the
trade in conflict diamonds?
- Who benefits in the process?
- How are the profits spent?
2. Are the internal structures and mechanisms adopted by the Kimberley Process
adequate in the pursuit of its ideology?
3. What are the social forces driving the trade in conflict diamonds?
23
3.1.2. Aim and rationale
Although numerous pages have been written on the subject of the Kimberley Process, one
could argue that academics have not done justice in addressing the effectiveness of the
Kimberley Process in politically weak countries such as the Democratic Republic of Congo
(DRC), Zimbabwe, Ivory Coast, and the Central African Republic (CAR). Such being the
case, this study is motivated by the need to stress the importance of a functional diamond
regulatory system, if a legitimate diamond trade is to be achieved. The effects of conflict
diamonds should not be underestimated, considering that abundance in natural resources,
especially in Africa, so significantly influences the quality of governance and institutions. In
this circumstance, there is need to constantly examine the diamond regulatory system,
checking whether it is still relevant to its objectives, and how best it can be improved to assist
member states to achieve a diamond industry that promotes sustainable development. If
natural wealth is not managed properly, as is the case of most diamond-rich African
countries, it might become a catalyst in the outbreak of conflict. This study serves to identify
the strongest and weakest areas of the Kimberley Process, such that the scheme operates
efficiently and minimizes the outbreak of diamond-related conflicts, among other key
concerns such as the resource curse and the abuse of human rights.
In the selected case studies of Zimbabwe and the Democratic Republic of Congo the research
aims to reveal the extent to which the Kimberley Process has succeeded in addressing the
problem of conflict diamonds. The study investigates how the political economy of conflict
diamonds in Africa works, and how that is linked to diamond mining activities in the selected
case studies. The study also aims to identify the social forces involved in the entire diamond
trade, those who benefit from the illicit trade, and whether it is the government, political elite,
business elite or common people.
The study questions whether it is not yet time that the Kimberley Process focuses more on the
crimes and underground diamond deals being committed by its own member states, rather
than focusing what is argued here as inordinate attention paid to the issue of diamonds in the
hands of rebel movements.
24
3.1.3. Research methods
Unlike in the natural sciences, where research is conducted through empirical experiments,
social science relies mostly on limited time scale predictions, where hypotheses are bound to
change over time.118 The core objective of social science is to understand and “explain social
action, social structure and social change”119. This paper adopts a similar objective in its aim
to assess and explain the extent to which the diamond regulatory system, known as the
Kimberley Process, has been able to realize its objectives in Zimbabwe and the Democratic
Republic of Congo.
This research was undertaken as a qualitative study through case studies and the careful
analysis of primary and secondary data. A qualitative research method involves the use of
various “philosophical assumptions, strategies of inquiry, and methods of data collection,
analysis, and interpretation”.120 The case study method was chosen due to its strength and
relevance in capturing context-specific detail.121 The method also enables the researcher to
thoroughly explore events through the use of various data collection procedures over a
continuous period of time.122 These methods were selected mainly on the basis of their
strength in terms of data collection and analysis, which assures an in-depth assessment of
phenomena. Additionally, the qualitative method is flexible, allowing for the examination of
complex and value-laden questions, unlike quantitative research methods. Ultimately, these
research approaches permitted the researcher to gain an understanding of the question at
hand, namely the extent to which the Kimberley Process has addressed problems as identified
in the two selected case studies.
These case studies will be used not for comparative purposes, but rather to draw out lessons
on how the Kimberley Process performed in their two respective countries, thereby
determining the extent to which the scheme has thus far been effective in each circumstance
on its own terms. Although the focus is placed on the two case studies, it should be
118 Kingston, W. “A Spectre is Haunting the World: The Spectre of Global Capitalism” in Journal of Evolutionary Economics, Vol. 10, No. 83, January 2000, p. 84. 119 Gill, S., “Epistemology, Ontology and The ‘Italian School’ in Gill, S (ed), Gramsci, Historical Materialism and International Relations, Cambridge University Press, Cambridge, 1994, p. 21. 120 Ibid 121 Yin, R.K.: Case Study Research, Sage Publications, California, 1994, p. 34. 122 Creswell, J.W: Op. Cit. p. 13.
25
mentioned that these are loosely used to demonstrate and reveal a broader understanding of
the efficacy of the Kimberley Process.
The two case studies were selected because they are currently the most targeted by the
Kimberley Process, and because the trade in diamonds in these countries has come under the
scrutiny not only of the Kimberley Process, but of the United Nations (UN) as well. Because
of that, it stimulated the need to examine the relationship of the Kimberley Process to these
respective countries.
The selection criteria used for case studies in this research was guided by the need to identify
the nature of problems characterizing the global diamond trade. For instance, the distinctive
features that characterize the diamond sector in Zimbabwe are a lack of transparency and
accountability by mining companies as well as the government. Whereas, in the Democratic
Republic of Congo, there is a power struggle that characterizes the trade, where the
government lacks legitimacy and a capacity to govern, whilst experiencing threats from
militant rebel movements and interference from external actors such as Rwanda in the
resources-rich areas of the country. These multifarious issues have guided this report in its
goal of achieving a holistic approach to understanding what is at stake in the Kimberley
Process, and the political economy of diamonds at large.
Primary sources for this study include documents released by the Kimberley Process, the
United Nations Security Council, and scholarly journal publications. These were acquired
from the Kimberley Process website, the UN online database and various journal sites such as
the Journal of International Studies, Rethinking Marxism, Journal of Conflict Resolution,
European Journal on Criminal Policy and Research, Social Research and The Round Table.
Part of the primary data was also obtained from reports and publications by non-
governmental organizations such as Global Witness (GW), Oxfam International (OI), and
Partnership Africa Canada (PAC). These NGOs have been assessing the work done by the
Kimberly Process since its establishment, hence their historically informed perspectives are
crucial in understanding the debates surrounding the Kimberley Process.
26
Secondary sources were collected from the University of the Witwatersrand main library, the
University of Johannesburg library, and the South African Institute of International Affairs
library. The library research method allowed for access to an array of scholarly literature,
especially on the subject of the political economy of Africa’s diamonds; the history of
conflict diamonds; Africa’s diamond wars in Angola, Sierra Leone and the Democratic
Republic of Congo; and the establishment of the Kimberley Process, among other key issues
of relevance. Time was invested in digesting textbooks, articles and newspapers with the
intention of developing an enhanced understanding of the subject at hand. The reason for
combining primary and secondary sources was to enhance the quality of information given in
this study and to bridge the flaws of secondary data where necessary.
This study also makes use of prominent daily and weekly newspapers, which include the
Mail and Guardian, the Business Day, the Zimbabwe Independent, the Standard and the Daily
News. These were of great benefit as they provided access to both current and otherwise
classified information surrounding the global diamond trade. They also provided information
related to how the illegal diamond market operates, the players involved, and also the efforts
made in achieving a ‘conflict diamond-free’ market. It ought to be borne in mind that such
information is not easily available, considering the highly secretive nature of the diamond
industry at large.
Leading online news websites such as Al Jazeera, the British Broadcasting Corporation, and
the Chicago Tribune were included in media-based research. It was found that these agencies
had the scope to cover the diamond trade in particularly great depth for their broad
international audiences.
3.1.4. Challenges and Limitations of Study
Although a qualitative method suits this study best, the researcher is aware of the subjectivity
that comes with this approach, particularly with regards to the problem of built-in researcher
bias. To minimize bias, the researcher confronted his own opinions and prejudices throughout
the process of data analysis.
27
Field research, behavioural observation of artisanal miners, and consultation with mine
authorities was not possible in the case of this study, due to the on-going conflict in these
areas as well as to financial and time constraints. Also, part of the data on the K.P. website is
restricted, which made it impossible for the researcher to access the particular information of
member states’ mining records and other critical information relevant to this study.
It should be mentioned that initially the Ivory Coast was made part of the case studies but due
to lack of information, resources and adequate time, the researcher decided to discard the
Ivory Coast and focus only on the two case studies of Zimbabwe and the D.R.C. Acquiring
information on the Ivorian diamonds proved to be a challenge, however, diamond issues in
the Western African country will be discussed in this report.
28
Chapter 4
Social Forces Approach to the International Political Economy of Conflict Diamonds in Africa
“The trade in illicit diamonds is extensive and global in nature”.123
4.1. International Political Economy of Conflict Diamonds in Africa
This chapter intends to shed some light on the political economy of Africa’s natural
resources, specifically on conflict diamonds. The focus of the chapter is to identify the social
forces driving the conflict diamond trade in Africa and how they are linked to overseas
diamond cutting and polishing centres as well as to other prominent global diamond trade
centres. To achieve this, the chapter adopts a framework that analyses the effects of the
relationship between economic, political, state-centric and rebel-centric factors in natural
resource-rich countries and the diamond industry in general. These internal dynamics are
important, as they enable one to get to the fundamentals that shape the trade in conflict
diamonds. Although the aim of this chapter is to understand the interrelationship between
political and economic dynamics in Africa’s natural resources, it is important to note that
these factors constantly change, hence it is not possible to claim full understanding of the
‘resource war’.124
Crucial to the international political economy is the connection of interests between markets,
states, and civil society.125 Key issues such as commodity and service production, the politics
of trade, development, environmental regulation, currencies, export control regimes, financial
123 UN Office on Drugs and Crime: Organised Crime and Instability in Central Africa, UNODC, http://www.unodc.org/documents/data‐and‐analysis/Studies/Central_Africa_Report_2011_web.pdf, Published: October 2011, p. 16. 124 Cater, C. “The Political Economy of Conflict and U.N. Intervention: Re‐thinking the Critical Cases of Africa” in Ballentine, K. and Sherman, J. (eds): The Political Economy of Armed Conflict: Beyond Greed and Grievance, Lynne Rienner Publishers, United States, 2003, p. 20. 125 Jorgensen, K.E: Op. Cit. p. 129.
29
flows and globalization all make up and characterise the international political economy.126
There is no single framework that serves a comprehensive understanding of the international
political economy, rather it is understood differently in various parts of the world.127 By
focusing on Africa’s political economy and paying attention to the social forces driving the
illegal diamond trade, this chapter aims to expose the problems that Africa and the diamond
trade are both facing. The International Political Economy (IPE) approach enables one to take
an aerial view over the issue of conflict diamond trade, an approach the K.P. has arguably not
adopted in understanding how conflict diamonds are connected to various issues of the arms
trade, human rights violations, money laundering and the embezzling of diamond funds by
member state governments.
Earlier chapters have argued that ideally, natural resources such as diamonds, gold and oil
ought to promote economic development, however, in the case of Africa, these natural
resources have become responsible for the outbreak of conflict and civil war, as witnessed in
the cases of the Democratic Republic of Congo, Angola, and Sierra Leone.128 Up until now,
these conflicts have resulted in the death of more than an estimated 3.7 million people in
Africa.129
4.1.1. Demand and Supply of Conflict Diamonds in post-Cold War Era
Since the 1870s, Africa has been the main global supplier of diamonds, however, over the
years, her role has been transformed to become a mere exporter of raw materials, while the
recipients in the developed world, have enjoyed the greatest share of the benefits of rough
diamonds.130 As mentioned earlier in the report, soon after the end of the Cold War era,
African countries had to settle for diamonds, among other minerals, as their source of funds
126 Ibid 127 Ibid. p. 130. 128 Reddy, S.G, and Henry, D, and Oppong, J. R: Op. Cit. p. 51. 129 Chicago Tribune., Diamonds: A War’s Best Friend, http://articles.chicagotribune.com/2001‐07‐06/news/0107060020_1_conflict‐diamonds‐diamond‐markets‐brutal‐wars, 06 July 2001, Accessed: 22 September 2012. 130 Even‐Zohar, C.: From Mine to Mistress – Corporate Strategies and Government Policies in the International Diamonds Industry. Mining Communications Ltd, London, UK, 2007, p. 2.
30
to support their wars.131 Diamonds became the easiest target for both rebels and government
officials, mainly because they are easy to smuggle, small in size, highly profitable, and they
maintain their value over a very long period of time.132 Amongst the major sources of conflict
diamonds were the D.R.C., Angola, and Sierra Leone.133 In Angola, Jonas Savimbi of the
National Union for the Total Independence of Angola (UNITA) was financially supported by
the United States Central Intelligence Agency (CIA) until the early 1990s, thereafter he began
supporting his rebel movement through trade in conflict diamonds, which generated a
staggering USD 4 billion in the short space of 10 years.134 In Sierra Leone, the rebel
movement Revolutionary United Front (RUF) received military and financial assistance from
Liberia’s former president Charles Taylor, in exchange for conflict diamonds.135 During the
Second Congo War of 1998, Laurent Kabila received military assistance from Zimbabwe
amongst eight other countries in the region, in exchange for diamond concessions.136 25
different rebel groups also took apart in the war, which left two million people dead.137
The story of Africa’s diamonds confirms that both legitimate governments and rebel groups
have been involved in the trade of conflict diamonds since the end of the Cold War. Such
being the case, diamond producing governments and rebel movements are identified as the
key social forces driving the trade in conflict diamonds in the period since 1991. The illegal
trade has thrived, due to political instability and poor systems of governance in the majority
of diamond producing countries.
131 Silverstein, K, “Diamonds of Death” in Levy, A.V. (ed): Diamonds and Conflict: Problems and Solutions, Novinka Books, New York, 2003, p. 65. 132 Ibid. p. 66. 133 Ibid 134 Ibid 135 Ibid 136 Ibid 137 Ibid
31
Fig. 1: Diamonds from the DRC, CAR, and Zimbabwe via East Africa to the World
Source: Extracted from the UNODC 2011 Report.138
The United Nations identified the biggest players in the trade of conflict diamonds as Liberia,
Ivory Coast, Guinea, Gambia, Togo, Burkina Faso, Zimbabwe and the Ukraine139.140 A 2011
Report published by the UN Office on Drugs and Crime added Burundi, the Central African
Republic, Chad, the DRC, Rwanda, and Uganda to the list of actors involved in the trade of
conflict diamonds and related crimes.141 These countries and rebel forces in the C.A.R. and
the D.R.C. are identified as the dominant social forces driving the trade in conflict diamonds
in Africa. Cameroon, Chad and the Darfur region of Sudan are known for providing an
overland passage for smuggled diamonds from the Central African Republic, and thereafter
they are exported via air to major diamond centres in Europe, the Middle East or South
Asia.142
It is important to note that Africa remains the key source of conflict diamonds, while
countries such as Israel, Belgium, United Arab Emirates, India and China provide markets for
138 UN Office on Drugs and Crime: Op. Cit. p. 69. 139 Ukraine particularly has been found guilty by the UN of exchanging arms for diamonds from UNITA. 140 Silverstein, K. Op. Cit. p. 66. 141 UN Office on Drugs and Crime: Op. Cit. p. 16. 142 Ibid
32
the smuggled diamonds.143 Generally, diamonds smuggled from Africa do not carry much
value on the African continent, however, once they reach key diamond destinations such as
India, their value automatically rises, which explains why foreign actors are those mostly
involved in the operation of African diamond mines.144 Financially, the illegal diamond trade
is predominantly controlled by entities and individuals from Belgium, India, Israel, Lebanon,
the Russian Federation, Switzerland, United Kingdom, Angola, the D.R.C., Mali, Senegal
and South Africa.145 In running their illegal diamond buying operations, these actors routinely
deploy experienced diamond buyers from Lebanon or Israel to purchase illegal diamonds
from African diamond producing countries.146
The Indian diamond cutting sector is said to have expanded as a result of the trade in conflict
diamonds.147 A combination of African diamond producing countries, rebel movements,
diamond smugglers and global diamond centres has serious consequences for the legitimate
diamond industry, and indeed for human development, especially in Africa. This kind of
trade has partly been responsible for economic and political instability in most parts of
diamond producing countries in Africa. The continent runs a deficit of large sums of diamond
money, which could potentially underpin development efforts.
An analysis of the conflict diamond trade in Africa reveals the existence of ‘underground’
trade routes between Africa and the diamond industry. These routes make it possible for
uncertified diamonds to reach the diamond industry without hindrance. The analysis also
reveals the absence of common agenda between some K.P. member states and several
diamond centres across the world. The illegal diamond trade is closely linked to arms trade,
the violation of human rights, corruption and tax evasion.148
143 Ibid. p. 69. 144 Silverstein, K: Op. Cit. p. 346. 145 UN Office on Drugs and Crime: Op. Cit. p. 78. 146 Ibid 147 Even‐Zohar, C. Op. Cit. p. 346. 148 UN Office on Drugs and Crime: Op. Cit. p. 69.
33
Diamond smuggling requires certain skills in order to successfully transport the illegal goods
from one place to the other, without detection.149 In most cases, cross border diamond
smuggling is done via air transport, with the help of corrupt (or poorly motivated) security
and customs officials.150 Smugglers use different methods, with some diggers go as far as
swallowing their stones so as to transport them safely to various diamond selling points, and
to completely avoid the legitimate trading protocols.151 The history of diamond smuggling
reveals that a typical smuggling operation makes use of a trusted courier, and upon arrival the
diamonds are mixed with local production, making it difficult to trace them.152 Smuggling is
usually performed to dodge export taxes in diamond producing countries, or if the diamond
country of origin is under K.P. sanctions.153 Another technique used by smugglers is bribing
custom officials such that they declare a low value on the diamond parcel, resulting in a
lower rate of tax.154
Fig. 2: Vulnerabilities of the diamond pipeline to illicit activity
Source: Extracted from the UNODC 2011 Report.155
149 Ibid. p. 76. 150 Ibid 151 Ibid 152 Ibid 153 Ibid 154 Ibid 155 UN Office on Drugs and Crime: Op. Cit. p. 76.
34
The UN mapped a diamond pipeline, which traces diamonds from mines to retail markets.156
The diamond pipeline identifies the social forces, faults and loopholes within the diamond
chain. Dominant social forces identified by the UN are illegal diamond diggers, diamond
mining employees, governments of diamond producing countries, illicit traders, diamond
cutting and polishing centres and legitimate diamond retail markets.157 Throughout the
diamond processing chain, the influence of these social forces in the diamond trade is
evident.158
As illustrated in Figure 2, throughout the diamond pipeline, each stage is exposed to
loopholes, hence constant surveillance on the flow of diamonds is required. The first stage in
the diamond pipeline, which is diamond mining, is exposed to illegal diamond diggers,
government interference, and employees.159 These social forces are capable of extracting or
stealing the diamonds illegally and feed the illicit diamond trade.160 The second stage, which
is rough trading, faces the similar issues of illicit traders, valuation fraud, stone substitution
and diamond smuggling.161 The third stage, cutting and polishing, is made vulnerable to illicit
cutting and polishing and employee theft.162 The fourth stage, polished trading, is mainly
exposed to trader theft and to the trading of illicit diamonds. The last and final stage of the
diamond pipeline, diamond retail, is susceptible to illicit sales, employee theft, and the sale of
illicit diamonds.163
The above-mentioned social forces propelling the illicit diamond trade usually thrive in areas
where diamond control systems are ineffective or non-existent. In the case of Africa, one
notices that many diamond rich countries have weak institutions and are governed by
authoritative political systems that control natural resources through political domination.
The diamond sector in the majority of these countries is characterised by a lack of
accountability and transparency, which arguably leads to the resource curse.
156 Ibid 157 Ibid 158 Ibid 159 Ibid 160 Ibid 161 Ibid 162 Ibid 163 Ibid
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4.2. Neoliberalism and the Illegal Trade of Diamonds
The current global order is characterised by a neoliberal ideology, which is that global
political economic force responsible for advancing the private interests of the elite and
controlling the social life of the people.164 At the centre of this ideology lies free market
policies that promote the proliferation of private enterprise.165
The neoliberal system of economic globalization and free trade markets has permitted the
trade in conflict diamonds to flourish, since rebel movements in resource-rich areas have
access to regional and international diamond markets the world over and are able to finance
their wars through these profits.166 In most African countries, particularly in the Central
African Republic, the Democratic Republic of Congo, and Zimbabwe, government officials,
armed groups and illegal miners are identified as the key social forces benefitting from
diamond trafficking.167 These social forces are able to trade diamonds with less difficulty,
due to the capitalistic nature of the global system, which has made it easy for both formal and
illegal diamond trade to take place.
Apart from providing markets for African conflict diamonds, Western countries are also
blamed for exchanging arms for conflict diamonds.168 The arms used in diamond-centred
civil wars are not manufactured in Africa, but in industrialised countries.169 Conflict
diamonds, among other conflict minerals such as oil and coltan, are not at present of
significant value in the African context, however, it is in a global context where value is
placed on these minerals and where they are hotly traded.170 Neoliberalism connects the trade
of conflict diamonds to other illegal forms of trade, such as the arms trade, which results in
massive violations to human rights in Africa.171
164 McChesney, R.W. “Introduction” in Chomsky, N: Profit Over People, Seven Stories Press, London, 1998, p. 7. 165 Ibid 166 Reddy, S.G, and Henry, D, and Oppong, J. R. Op. Cit. p. 53. 167 UN Office on Drugs and Crime: Op. Cit. p. 78. 168 Cater, C. Op. Cit. p. 67. 169 Ibid. p. 33. 170 Ibid 171 Oxfam International, Why we need a global Arms Trade Treaty, http://www.oxfam.org/en/campaigns/conflict/controlarms/why‐we‐need‐global‐arms‐trade‐treaty, Accessed 23 November, 2012.
36
4.3. Armed Conflicts as Money-Making Ploy
The history of Africa has been characterised by violent conflict and civil war, a phenomena
commonly associated with the underdevelopment of the continent.172 The outbreak of civil
wars has become more common when compared to interstate wars.173 Contrary to the popular
belief that conflict or war is a negative phenomenon or system breakdown and all parties
involved intend to win the war, it should be noted that war, at times, is used as a smokescreen
for the attainment of power, protection and economic benefits.174 Different social forces are
driven by a variety of motives for going to war, whilst for others, the longer the warfare
unfolds, the more profits they acquire.175 This argument is supported by literature on the so-
called ‘political economy of war’, which explores the argument that resource-related conflicts
are sometimes prompted by national and international economic actors.176
In a natural resource conflict, rebel movements are less motivated to win the war, rather, their
primary concern is to loot as much natural wealth as possible, and hence most times they
prolong a given conflict.177 Grievance and greed, rather than socio-political grievances of
development have been propelling the outbreak of civil wars over the course of the last half-
century.178 Africa’s failure to promote political, social and economic stability has resulted in
the outbreak of conflict.179
Natural resources in Africa are usually governed through the politics of domination.180 The
civil wars in Angola, Liberia, Sierra Leone and the D.R.C. have revealed how the concept of
172 Moss, T.J.: African Development: Making Sense of the Issues and Actors, (2nd Edition), Lynne Rienner Publishers, United States of America, 2011, p. 57. 173 Collier, P. and Hoeffler, A. “Greed and Grievance in Civil War.” The Centre for the Study of African Economies Working Paper Series. Working Paper 160, 2002, p. 1. 174 Keen, D. “Incentives and Disincentives for Violence” in Berdal, M. and Malone, D. (eds): Greed and Grievances: Economic Agendas in Civil Wars, Lynne Rienner Publishers, United States, 2000, pp. 19‐21. 175 Ibid 176 Kantz, C. “The Power of Socialization: Engaging the Diamond Industry in the Kimberley Process” in Business and Politics, Vol. 9, Iss. 3, 2007, p. 2. 177 Keen, D. Op. Cit. pp. 26‐27. 178 Collier, P. and Hoeffler, A: Op. Cit. p. 6. 179 Reddy, S.G, and Henry, D, and Oppong, J. R. Op. Cit. p. 53. 180 Le Billon, P, “The political ecology of war: Natural Resources and Armed Conflict”, in Political Geography, Vol. 20, 2001, p. 562.
37
domination was employed by rebel leaders (Jonas Savimbi, Charles Taylor, Foday Sankoh
and Mobutu Sese Seko) in controlling diamond trade.181
4.4. Money Laundering in Africa: Corporate Social Providers
As has been mentioned, the majority of African leaders are often criticized by the developed
world for high levels of corruption, looting of state resources and the failure to channel
national wealth towards economic development.182 Although these accusations may be
justified, certain Western countries are likewise to blame for taking part in corrupt activities
and providing safe havens for ‘dirty money’ from Africa’s corrupt officials.183
In theory, international money laundering regulations should serve to curb the transfer of
corruption money around the world. However, the history of Africa proves that the developed
world’s financial system remains the prime recipient of dirty money from Africa.184 The
developed world fails to resist the temptation of the large sums of ‘dirty money’ emanating
from Africa, hence they take part in crafting off-shore companies and investment entities for
corrupt African leaders.185 These financial companies are designed in such a way that the true
identity of the owner remains hidden, allowing corrupt African leaders to amass millions of
dollars in overseas banks without a trace.186
Most African countries rich in natural resources are characterized by secrecy jurisdictions and
complex legal structures.187 These conditions promote tax avoidance and off budget
government spending by the elite.188 The Zimbabwean and D.R.C. diamond sectors are an
example of how a lack of adequate legal structures, transparency and accountability promotes
181 Reddy, S.G, and Henry, D, and Oppong, J. R. Op. Cit. p. 52. 182 Aljazeera (A), How to Rob Africa, http://www.aljazeera.com/programmes/peopleandpower/2012/11/201211714649852604.html, Accessed: 08 November 2012. 183 Ibid 184 Ibid 185 Ibid 186 Ibid 187 Ibid 188 Global Witness (B), Diamonds: A Good Deal for Zimbabwe, Global Witness, http://www.globalwitness.org/sites/default/files/library/A%20GOOD%20DEAL%20FOR%20ZIMBABWE_0.pdf, February 2012, p2.
38
the embezzling of state funds by the elite.189 Political elites are able to siphon state resources
through political domination, the use of political power to suppress all opposition, and the
absence of effective regulatory structures.
4.5. The Diamond Industry: Monopoly, Corporate and Consumer Issues
Tracing the history of the diamond industry enables an understanding of how the
contemporary diamond industry came about and the social forces that govern it. By
recognizing these forces, one is in a position to identify their different interests in the
diamond industry.
Cecil John Rhodes, the founder of De Beers, was a profit-oriented businessman, driven by
capitalistic ideas.190 Rhodes’ vision for De Beers was extravagant, wanting his company to be
“the richest, the greatest, and the most powerful company the world has ever seen”.191
However, De Beers’ involvement in Zaire during the Mobutu era was marred with
controversy.192 It was involved in the trade of conflict diamonds and it established diamond
buying offices in neighbouring countries with the intention to buy all the diamonds smuggled
out of Zaire.193 De Beers also admitted to having purchased conflict diamonds from UNITA
during the Angolan civil war, which ended in 2002.194 The company also made use of
undercover buyers. One of the most famous of these buyers was Fred Kamil, whose task was
to search for diamond smugglers and to purchase their conflict diamonds on behalf of De
Beers.195
Today, De Beers has succeeded in becoming a demand-driven business, rather than supply-
driven one.196 However, the diamond industry is still faced with corporate and consumer
challenges threatening the diamond value chain.197 Issues of accountability, transparency,
189 Aljazeera (A): Op. Cit. 190 Ibid 191 Ibid. p. 241. 192 Even‐Zohar, C: Op. Cit. p. 345. 193 Ibid 194 Ibid. p. 67. 195 Ibid p. 345. 196 Ibid. p. 1. 197 Ibid. p. 3.
39
social and corporate responsibility, environmental concerns, new technologies, ethical
concerns and compliance are the central concerns to the diamond industry.198 Considering
that the diamond industry thrives on consumer confidence, the above-mentioned issues
require attention if consumer confidence is to be maintained.199
Critics of the diamond industry, such as Representative McKinney, argue that today’s
successful diamond centres in Antwerp and Tel Aviv are a direct result of the untold human
suffering of the people of Sierra Leone, Angola and the D.R.C.200 The biggest beneficiaries of
the diamonds however, are the international diamond corporations in control of the diamond
industry.201
The dominant social forces making up the diamond industry and partly responsible for the
illegal diamond trade are De Beers, African diamond producing countries, global diamond
centres and diamond smugglers. These forces appear to be driven by the need to make profit
at the expense of human development. Such has been the trend of the diamond industry since
its inception.
198 Ibid 199 Ibid. pp. 3‐4. 200 Silverstein, K: Op. Cit. p. 66. 201 Ibid
40
Chapter 5
The Kimberley Process Certification Scheme
5.1. Diamond Industry prior to the Kimberley Process
Whether or not the unsuccessful Kimberley Process was doomed to failure from the moment
it was established one cannot say, however, what is known is that diamond smuggling and
regulation began around the 1880s, following the diamond discovery in Kimberley, South
Africa.202 The Trade in Diamonds Consolidation Act of 1882 was adopted to curb smuggling
in the old South Africa, and it failed.203 Up until 1930, it was unlawful to be in possession of
an uncertified rough diamond in South Africa and South West Africa (Namibia), with the
idea by mine owners to monopolise the diamond industry such that diamond prices remained
high.204
Prior to the inception of the Kimberley Process in 2003, approximately 25 percent of the
entire world’s diamond trade was linked to the illegal diamond market.205 The United Nations
General Assembly (UNGA) has meanwhile confirmed the link between conflict diamonds
and threat to human safety and security.206 Lack of significant diamond regulations led the
diamond industry to seek help from paramilitary forces and other illegal groups to exploit
202 Crawford‐Browne, T: Op. Cit. p. 33. 203 Ibid 204 Ibid 205 The Diamonds and Human Security Project: Diamonds and Human Security Annual Review 2009, Partnership Africa Canada, http://www.pacweb.org/Documents/annual‐reviews‐diamonds/AR_diamonds_2009_eng.pdf, 10 August 2012, p. 2. 206 United Nations General Assembly, Resolution 55/56(2000): The role of diamonds in fuelling conflict: breaking the link between the illicit transaction of rough diamonds and armed conflict as a contribution to prevention and settlement of conflicts, United Nations General Assembly, http://www.nrcan.gc.ca/sites/www.nrcan.gc.ca.minerals‐metals/files/pdf/mms‐smm/busi‐indu/kpd‐pdk/un‐resol‐eng.pdf, 29 January 2001, p. 1. Accessed: 16 January 2013.
41
diamond resources.207 These illegal diamonds were able to reach the formal diamond trade
due to the widespread lack of transparency and accountability in the industry.208 They were
also being traded for arms, used in money laundering, tax evasion, drug trafficking, sanction-
busting and terrorist financing.209 Diamond producing countries, especially in Africa, have
been all the while deprived of full access to diamond profits.210
The first steps by the international community to curb the trade in conflict diamonds were
taken in July 1998 by the United Nations Security Council (UNSC), when it passed a
diamond export embargo on Angola under Resolutions 1173 and 1176.211 This undertaking
by the UN was as a result of rebel movement, the National Union for the Total Independence
of Angola (UNITA), using diamonds to fund conflict.212 To guarantee the effectiveness of the
embargo, a diamond certification system to monitor the flow of diamonds from Angola was
introduced between diamond producing countries.213 However, over time the diamond control
systems began to be ineffective, as loopholes began to emerge and cases of diamond
certificate forgery became common, leading to the smuggling out and trading of Angolan
diamonds.214 A year later, a similar resolution was adopted by the UNSC to curb the trade in
conflict diamonds in Sierra Leone.215
The case of Angola and Sierra Leone drew international attention and forced the major
diamond producing countries of South Africa, Namibia and Botswana to summon fellow
major diamond trading and producing countries, representatives of the diamond industry, and
NGOs to work together and forge a quick solution to the problem that was threatening their
industries.216 Massive campaigns by NGOs (led by the Global Witness) against the trade in
207 Kantz, C: Op. Cit. p. 1. 208 Ibid 209 The Diamonds and Human Security Project: Op. Cit. p. 2. 210 Ibid 211 Ibid 212 The Diamond High Council: Op. Cit. 213 Ibid 214 Ibid 215 Wright, C. “Tackling Conflict Diamonds: The Kimberley Process Certification Scheme” in International Peacekeeping, Vol. 11, No. 6. Winter 2004, p. 698. 216 Kantz, C: Op. Cit. p. 2.
42
conflict diamonds put pressure on the diamond industry, leading to the establishment of an
inaugural global diamond regulatory system that was named the Kimberley Process.217
It must be noted, however, that although the UN played a key role in facilitating the
Kimberley Process negotiations, the Kimberley Process is not a UN initiative.218 The
involvement of the UN was limited from the early stages of the negotiations since the K.P.
was created for states directly involved in the international diamond trade, and any other
interested parties.219 K.P. actors concluded that it was not practical to have UN involvement
since its efforts was mainly limited to a few diamond exporting and importing countries.220
5.2. Establishment of the Kimberley Process Certification Scheme
The Kimberley Process Certification Scheme thus came into effect in January of 2003.221 A
tripartite union, made up of three key social forces, the diamond industry, NGOs, and
national governments.222 The K.P. is regarded as the first international agreement in global
trade politics made in this way between governments, industry and NGOs.223 Throughout the
negotiations, the actors proceeded as equal partners.224 However, the powerful position of the
diamond industry is believed to have given corporate actors dominance throughout the
negotiation process.225
As a socializing agent, the corporate diamond sector used its technological knowledge and its
interpretations of ideational and material facts in shaping K.P. discussions.226 The entire
discussions were held in an atmosphere of palpable mistrust, with stakeholders seeming to
217 Ibid 218 Wright, C: Op. Cit. p. 701. 219 Ibid 220 Ibid 221 Schefer, K.N: Op. Cit. p. 393. 222 Bieri, F.: From Blood Diamonds To The Kimberley Process: How NGOs Cleaned Up The Global Industry, Ashgate Publishing Limited, England, 2010, p. 54. 223 Kantz, C: Op. Cit. p. 1. 224 Ibid 225 Ibid 226 Ibid
43
hold significantly divergent interests.227 In the same breath, a number of governments were
against the use of the word ‘agreement’ in drafting the documents, which portrayed how
unready they were in working towards a common solution.228 One notices that the dominance
that the diamond industry demonstrated during the negotiation process is still the same
dominance it enjoys today, as a self-regulating industry.
Although the scheme was negotiated as a public-private partnership, the final product took a
double approach to regulation, namely inter-governmental regime and industry self-
regulation.229 The intergovernmental regime is composed of a number of politically-binding
common standards, which are endorsed by each member state’s national legislation.230 It
should be mentioned that the KPCS acts not as a legally-binding treaty between sovereign
states, but as a set of politically-binding minimum common standards, put into law by
member states’ national legislation.231 It is these minimum standards that control and monitor
the import and export of rough diamonds in every member state, such that their diamond
sectors remain free of conflict diamonds.232 The agreement also requires member states to
uphold various levels of transparency, monitoring and co-operation between member
states.233
5.3. The Kimberley Process Ideology
The ideology of the Kimberley Process is ostensibly centred on the need to create a conflict-
free diamond industry.234 Once this is realised, the K.P. is convinced that rebel movements
will cease to use diamond funds to topple legitimate governments.235 The K.P. is aware that
the trade in conflict diamonds is linked to serious matters of international concern, such as the 227 Ibid. p. 12. 228 Schram, F. The Legal Aspects of the Kimberley Process, Fatal Transactions, http://www.fataltransactions.org/Publications/The‐legal‐aspects‐of‐the‐Kimberley‐Process, Accessed: 25 May 2012, p. 7. 229 Kantz, C: Op. Cit. p. 3. 230 Wright, C: Op. Cit. p. 699. 231 Ibid 232 Ibid 233 Ibid 234 Wright, C. Op. Cit. p. 699. 235 Kimberley Process (B), Kimberley Process Basics, http://www.kimberleyprocess.com/web/kimberley‐process/kp‐basics, 26 January 2013.
44
illicit trafficking of arms, which threatens the safety and security of people in or around
diamond producing countries.236 To avoid such cases, K.P. member states agreed to trade
only K.P. certified diamonds.237 They also agreed to trace the flow of rough diamonds from
mines to diamond markets through the process of diamond certification.238 This process
requires diamond cutting and polishing centres to identify the origin of rough diamonds and
in so doing, to detect illegal diamonds.239
The K.P. ideology operates in an extractive industry, which is known for perpetuating human
rights abuses, corruption, environmental degradation and the outbreak of conflicts in parts of
Africa.240 The extractive industry is dominated by large Multinational Companies (MNCs),
which are difficult to monitor, since they are technologically and financially strong whilst
operating in host countries with weak regulatory controls.241 Unfortunately, such a situation
provides MNCs with large amount of structural and business power, making them difficult to
regulate.242
The K.P. ideology does not account for the fact that problems associated with conflict
diamonds do not only emanate from the supply side, and it is argued here that it ignores
relevant factors in the global economic context that facilitate illicit trade. If a universal
solution to the problem is to be found, there is need for the K.P. to identify the different
social forces and beneficiaries involved in the illegal trade of diamonds. The weaknesses of
the ideology that governs the K.P. demonstrate its failure to understand or acknowledge the
extent of the political economy of conflict diamonds. Moreover, the scheme tries to fix the
diamond market, yet the market itself is partly responsible for perpetuating the trade in
conflict diamonds. In the end, one notices that the market-solving approach adopted by the
K.P. is indirectly promoting the neo-liberal agenda, an agenda responsible for the provision
of the markets that support illegal diamonds.
236 Kimberley Process (A): Op. Cit. p. 1. 237 Wright, C. Op. Cit. p. 699. 238 Koh, J., The Kimberley Process: Has it Stopped the Conflict Diamond Trade? www.stanford.edu/class/e297a/Kimberly%20Process.doc, 16 February 2012, p. 4. 239 Ibid 240 Kantz, C: Op. Cit. p. 1. 241 Ibid 242 Ibid
45
5.4. Structural Analysis of the Kimberley Process
The Kimberley Process is a multilateral endeavour, advancing an economic-political agenda
to stop the trade in conflict diamond.243 As of August 2012, the scheme had 51 participants,
representing 77 countries, together with the 27 European Union member states.244 Actors
within the K.P. are broadly divided into two categories, that is, observers and participants.245
Observers consist of civil society, the diamond industry, international organisations and non-
participating governments, while participants are made up of state governments or regional
organisations that are actively part of the certification scheme.246
Ideally, participants and observers should have plenary meetings each year, while participants
can meet whenever need to discuss issues affecting the efficiency of the certification scheme
arises.247 These meetings are normally held in the country of the incumbent K.P. Chair.248 In
some instances, a participant or an international organisation may offer to host a meeting and
facilitate entry formalities for all attendees.249
Unlike member states, which are constantly monitored by the K.P., the diamond industry,
which is represented by the World Diamond Council, has adopted a parallel and
complementary monitoring system of self-regulation and systems of warranty.250 This type of
regulation put the diamond industry in a powerful position, since it is not accountable to any
legislative authority or any form of regulation from KPSC actors.251 Under the systems of
warranty, the diamond industry is expected to provide:
a Code of Practice designed to eliminate the presence of conflict
diamonds; the provision of warranties or guarantees on each invoice
for a sale of rough or cut and polished diamonds, attesting that the
243 Schram, F: Op. Cit. p. 5. 244 Antwerp World Diamond Centre, Kimberley Process, http://www.awdc.be/en/kimberley‐process‐0, 27 June 2012. 245 Kimberley Process (A): Op. Cit. p. 4. 246 Ibid 247 Ibid. p. 9. 248 Ibid 249 Ibid 250 Wright, C: Op. Cit. pp. 700‐701. 251 Schram, F: Op. Cit. p. 5.
46
goods are conflict-free; maintaining detailed records of purchases and
sales of rough diamonds; and the use of independent auditors to attest
that the Code, warranties and records are being deployed, provided
and maintained correctly.252
Failure by diamond companies to comply with these principles results in expulsion from the
industry organisation’s World Federation of Diamond Bourses (WFDB) and the International
Diamond Manufacturer’s Association (IDMA).253
Following their significant participation in the establishment of the Kimberley Process, civil
society groups seem to have been forgotten by both national governments and the diamond
industry alike.254 This is as a direct result of the fact that both national governments and the
diamond industry all have a direct role to play in the K.P.255 National governments dominate
the process of implementing the KPCS, through legislation, regulation and administrative
procedures; while the diamond industry is self-regulatory, which leaves civil society as the
only participant without a direct role to play in the KPCS.256
Since the adoption of the agreement, the role of civil society in the KPCS has been severely
diminished.257 Nonetheless, several NGOs such as Global Witness, Action Aid, Oxfam
International, Partnership Africa Canada and Amnesty International have continued to
operate at national level, helping member states to adopt diamond control systems that
promote greater transparency and accountability.258 A number of NGOs have also continued
to apply pressure to the diamond industry, particularly on issues of self-regulation and
independent audit.259 Even so, national governments and the diamond industry continue to
identify NGOs as social forces threatening their interests. As a result, NGOs have been side-
lined by some national governments through being rejected permission to visit and monitor
252 Ibid 253 World Diamond Council, The Essential Guide to Implementing The Kimberley Process, World Diamond Council, http://www.jvclegal.org/kimberely.pdf, New York, 2003, pp.11‐12. 254 Wright, C: Op. Cit. pp. 700‐701. 255 Ibid 256 Ibid 257 Ibid 258 Ibid 259 Ibid
47
diamond sites, yet they remain critical forces able to reveal the irregularities within the
KPSC.260
5.5. Key Challenges facing the Kimberley Process
Like the majority of international arrangements, the Kimberley Process is not a perfect
construct.261 This section of the report discusses the major challenges impacting upon the
effectiveness of the scheme. It should be noted, however, that this unique partnership
between governments, the international diamond industry is still evolving, hence more time is
required for it to be fully effective.262
5.5.1. Self-Regulatory Industry
Amnesty International and Global Witness, two prominent human rights and natural
resources observers, argue that the self-regulating diamond industry is not fully implementing
the system of warranty as per the Kimberley Process Certification Scheme agreement, hence
some illegal diamonds are still being traded at the formal diamond retail markets.263 Since the
K.P. does not have the jurisdiction to control the self-regulatory diamond industry, the
scheme finds itself with limited options in understanding what transpires when diamonds
reach the diamond industry.264 The K.P. is not in a good position to determine whether the
diamond industry buys illegal diamonds or not. As a result, the civil society has since become
the watchdog of both the diamond industry and the K.P. itself.265 Global Witness and Human
Rights Watch constantly argue that the K.P. has failed to deliver, considering that conflict
diamonds are still reaching legal diamond markets through legal and illegal channels.266 As a
result, it is the people of Africa who pay the price, since the trade in conflict diamonds is
260 Ibid 261 Bone, A. “The Kimberley Process Certification Scheme: The primary safeguard for the diamond industry” in Lujala, P. and Rustad, S.A. (eds): Have‐Value Natural Resources and Post‐Conflict Peacebuilding, Earthscan, London, 2012, p. 190. 262 Ibid 263 Yaziji, M, and Doh, J.: NGOs and Corporations: Conflict and Collaboration, Cambridge University Press, Cambridge, 2009, p. 163. 264 The Diamonds and Human Security Project: Op. Cit. p. 2. 265 Ibid 266 BBC, Diamonds: Does the Kimberley Process Work? http://www.bbc.co.uk/news/10307046, Published: 28 June 2010.
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linked to the outbreak of armed conflicts, as witnessed in the Democratic Republic of Congo
(DRC) and the Ivory Coast.267
5.5.2. Weak Internal Diamond System Control
The Diamonds and Human Security Annual Review indicated that the K.P. is failing dismally
in its duties to halt the trade in conflict diamonds, due to its failure to strengthen member
states internal diamond monitoring mechanisms.268 Poor implementation of the K.P.
requirements by member states is a result of the voluntary and non-binding nature of the
scheme.269 When member states fail to conform to regulations, many a time the scheme has
struggled to come up with effective punitive measures.270
The Kimberley Process Peer Review mechanism evaluates member states’ compliance to the
minimum requirements once every three years, and provides recommendations where
necessary.271 However, more often than not, member states such as the D.R.C. and Zimbabwe
fail to take heed of the recommendations, thereby creating loopholes in the diamond
regulatory system.272 On the other hand, the KPCS review team is blamed for its failure to
follow-up and confirm whether member states have implemented the recommendations.273
The cases of the Ivory Coast, the D.R.C., Angola, Brazil, and Venezuela exemplify failure of
the K.P to convince member states to implement necessary recommendations.274 These states,
among others, have constantly failed to submit their statistical data on time, which is a
gesture of poor commitment towards the scheme.275 This results in the Kimberley Process
having an outdated statistical data base, meaning that the scheme will not be aware of the
current diamond trading patterns of member states.276
267 Ibid 268 The Diamonds and Human Security Project: Op. Cit. p. 1. 269Jojarth, C.: Crime, War, and Global Trafficking, Cambridge University Press, New York, 2009, p. 209. 270 Koh. J: Op. Cit. p. 13. 271 The Diamonds and Human Security Project: Op. Cit. p. 1. 272 Ibid 273 Ibid 274 The Diamonds and Human Security Project: Op. Cit. p. 2. 275 Koh. J: Op. Cit. p. 17. 276 Ibid
49
5.5.3. Excessive Respect for State Sovereignty
The extent to which the Kimberley Process observes state sovereignty has become a
hindrance to the diamond regulating process.277 Unlike other organisations such as the United
Nations, which can deploy peacekeeping troops when the need arises, the Kimberley Process
has very limited options to choose from when a member state fails to adhere to its
requirements.278
The diamond regulatory system operates on the basis of cost and benefit analysis for most
member states.279 Only a few states take the scheme to be of importance and are convinced
that a better functioning diamond trading system will benefit them directly.280 A majority of
countries are in the ‘neutral zone’, they are not eager to fully implement the Kimberley
Process Certification Scheme requirements, resulting in the mal-functioning of the scheme.281
Failure by the K.P. to significantly challenge sovereign states is explained by the concept of
‘captive regulation’. This is when an authority which ought to protect public interests
abandons its duty in favour of commercial or special concerns of interests groups that have
control over key sectors or industry.282
5.5.4. Definition of Conflict Diamonds
The Kimberley Process defines conflict diamonds as “rough diamonds used by rebel
movements or their allies to finance conflict aimed at undermining legitimate
government.”283 The same diamonds are colloquially referred to as ‘blood diamonds’.284
277 Ibid. p. 13. 278 Ibid 279 Jojarth, C: Op. Cit. p. 192. 280 Ibid 281 Ibid 282 Woodward, S: “Regulatory Capture at the U.S. Securities and Exchange Commission” Paper presented at the Milken Institute Conference on Markets, March 16 1998, Santa Monica, California, Accessed: 19 July 2013 http://www.sandhillecon.com/pdf/RegulatoryCapture.pdf 283 Kimberley Process (A): Op. Cit. p. 3. 284 Grant, J.A. and Taylor, I: “Global Governance and Conflict Diamonds: The Kimberley Process and the Quest for Clean Gems” in The Round Table, Vol. 93, No. 375, July 2004, p. 385.
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Although this definition was agreed upon by the United Nations, NGOs, and other
stakeholders, it remains weak, as it fails to cover all of the crucial aspects pertaining to
conflict diamonds.285 The definition is biased towards legitimate governments, it does not
indicate what the concept ‘legitimate government’ consists of, and as a result it places full
responsibility on each and every so-called legitimate government.286 There is no guarantee
that all legitimate governments will utilize the diamond wealth in any way different to that of
rebel movements.287
Contrary to the official definition of conflict diamonds, Ian Smillie, a renowned critic of the
K.P., defines conflict diamonds as “diamonds that have been stolen, smuggled or used for the
purposes of tax evasion and money laundering”.288 Apart from smuggling of conflict
diamonds by rebel movements, the K.P. has neglected other cases of diamond smuggling by
private individuals, organised syndicates, and employees during mining operations.289
It becomes evident that the definition of conflict diamonds by the K.P. is meant not only to
protect governments from rebel movements, but also to limit its own authority over its
member states’ internal affairs.290 The K.P. is highly exposed to international politics, such
that its very operational nature becomes political, as governments utilise the scheme to
acquire legitimate powers to protect their interests at all costs.291
Whether the definition will eventually be re-defined is not known at this point, but judging
from the recent Kimberley Process meetings, the United States and her Western allies are
vying for a new definition of the conflict diamond, one that takes into account issues of
irresponsible governments, child labour, health issues, safety and security threats of diamond
285 Jojarth, C. Op. Cit. p. 186. 286 Ibid 287 Ibid 288 Smillie, I: Op. Cit. 289 Jojarth, C: Op. Cit. p. 182. 290 Rapaport, M (A), Stop Buying and Selling Blood Diamonds: The Kimberley Process and World Diamonds Council are a sham, Rapaport Diamond Report, http://www.diamonds.net/News/NewsItem.aspx?ArticleID=29578&ArticleTitle=Stop+Buying+and+Selling+Blood+Diamonds, p. 8. Accessed: 26 February 2010. 291 Ibid
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workers, and the key roles that the diamond industry should play in fostering issues of
development.292
5.5.5. Lack of Central Authority
Lack of central authority compromises the K.P.’s ability to effectively regulate the diamond
trade.293 The K.P. chairmanship, which rotates annually, does not have any significant
authority other than the power to convene meetings.294In addition, the tendency by the K.P. of
shifting critical issues affecting the scheme from one working group to another, compromises
the efficiency of the scheme.295 In trying to make every member state equal, the K.P. runs the
risk of blocking progress, since members have to unanimously agree before discussions are
made.296 Collective responsibility weakens the K.P., since shared accountability leads
member states to become complacent.297
Failure by the Kimberley Process to have key organs, such as a secretariat and a pooled
budget, compromises the effectiveness of the scheme, since responsibilities are constantly
shifted from one member state to the other in a situation where the scheme relies too much on
member states resources.298 Workload and financial commitments of the initiative ought to be
undertaken by a central specialised unit or department, rather than rely upon the voluntary
effort of member states.299
5.6. Kimberley Process Positive Contributions
In as much as the K.P. has its own limitations, it is still regarded as an important initiative,
which seeks to bring different stakeholders together to confront not only the issue of conflict
diamonds, which fuels conflicts, but also the other social and economic issues which stem
292 McConnell, K. Africa: Countries Seek Ways to Stop Trade in Conflict Diamonds, All Africa. http://allafrica.com/stories/201206081424.html, Accessed: 8 June 2012. 293 The Diamonds and Human Security Project: Op. Cit. p. 1. 294 Ibid 295 Ibid 296 Ibid 297 Ibid 298 Bieri, F: Op. Cit. p. 20. 299 Ibid
52
from trade in conflict diamonds.300 Considering that the UN took part in the establishment of
the K.P., it demonstrates the uniqueness, importance and potential of the scheme in dealing
successfully with issues of illicit diamond trade.301 The scheme facilitated the convergence of
governments, industry and civil society in finding a common resolution to the illegal
exploitation of the natural resources.302 The KPSC has become a tool and a practical measure
used by the international community in solving issues of international security and conflict
prevention.303 When compared to other commodity-tracking regimes, such as the Convention
on International Trade in Endangered Species (CITIES), or the Basel Convention on
Hazardous Waste, the K.P. has a relatively strong certification scheme.304
5.6.1. Strict implementation of minimum requirements
The strength of the initiative lies in the voluntary nature of member compliance, however,
although it appears voluntary on paper, in practice it is compulsory.305 Unless a state
voluntarily adopts K.P. requirements, it cannot trade with K.P. member states.306 The
minimum requirements of the scheme demands that member states implement national
reforms, where weak states are forced to adopt policy which promotes law and order, leading
to a degree of transparency and accountability in the diamond trade.307
The K.P. article 16 of section 6 guarantees member states the option to lay a complaint
against fellow member states, after which a review team will investigate the claims.308 Unlike
the ‘veto system’ used by other organisations such as the United Nations Security Council,
300 Dinat, N.: The Kimberley Process Certification Scheme: The International Response to the Trade in Conflict Diamonds Unpublished MA Research Report, The University of Witwatersrand, Johannesburg, 2004, p. 6. 301 Wright, C. Op. Cit. p. 702. 302 Ibid 303 Ibid 304 Kantz, C: Op. Cit. p. 4. 305 Smillie, I: Op. Cit. p. 4. 306 Ibid 307 Ibid 308 Muller, E. “Kimberley Process faces big challenge on smuggling”, Business Day, http://allafrica.com/stories/200310300289.html, Accessed: 30 October 2003.
53
the KPSC provides a fair and equal platform for all member states to contribute towards the
agenda of the K.P., regardless of their level of development.309
5.6.2. Reduction of Conflict Diamonds from Africa
Since the end of the Sierra Leonean civil war in 2002, there has been a significant reduction
in conflict diamonds coming from Africa’s conflict zones reaching the formal diamond retail
markets.310 However, it is still difficult to confirm the actual percentage decrease, simply
because in warzone conditions, it is difficult to account for all diamonds smuggled.311 The
K.P. is credited for its role in the diamond wars of West Africa in the 2000s, where it
successfully reduced the trade in illegal diamonds.312
Compared to other activist-driven campaigns focused on Africa, such as aid conditionality,
debt relief, and the provision of development assistance, the problem of conflict diamonds
saw international actors working together in response to the crisis.313 The NGO sector is
credited for instigating multi-track diplomacy amongst international actors.314 NGOs also
managed to influence the public, national governments and the corporate world alike, through
their research findings.315 For partly initiating a campaign that eventually influenced policy
both at national and global level, NGOs demonstrated how influential and critical a sector
they prove to be.316
309 United Nations Security Council. The Security Council, http://www.un.org/en/sc/, Accessed: 17 May 2012. 310 Hoyt, A., How the African Diamond Trade Works, http://history.howstuffworks.com/african‐history/african‐diamond‐trade.htm, Accessed: 18 August 2012. 311 Ibid 312 Lezhnev, S. and Sullivan, Certification: The Path to Conflict‐Free Minerals from Congo, Enough Project, http://www.enoughproject.org/files/certification_paper_0.pdf, p. 20. Accessed: 16 May 2012. 313 Grant, J.A. and Taylor, I: Op. Cit. p. 386. 314 Ibid 315 Ibid. p. 387. 316 Ibid
54
Chapter 6
Kimberley Process in Zimbabwe and the Democratic Republic of Congo
6.1. Diamond Mining in Zimbabwe
55
Source: Extracted from the 2011 UNODC report.317
317 UN Office on Drugs and Crime: Op. Cit. p. 73.
56
6.1.1. Background
Diamond mining in Zimbabwe dates back to the mid-nineteenth century, when artisanal
mining was the dominant type of mining.318 But beginning in 2004, industrial diamond
mining operations began at the River Ranch and Murowe mines.319
Theoretically, diamonds could be discovered anywhere in Zimbabwe due to the geological
location of the country along the ‘Zimbabwe Archaen Craton’, which is known to be rich in
kimberlite deposits.320 The diamond-rich craton runs from north-east, south and west of
Zimbabwe and crosses over into neighbouring Botswana.321 Some of the world’s leading
diamond mines, such as the Orapa and Lethlekane diamond mines of Botswana, are found
close to the border separating Zimbabwe and Botswana, an area referred to as ‘Orapa
Kimberlite Track’.322 Apart from diamonds, Zimbabwe is endowed with several other forms
of mineral wealth, such as gold, platinum, lithium, coal, nickel, tin and methane gas, with
plenty more sources than have yet been exploited.323 However, the country does not have
adequate capital and technological resources to fully exploit these minerals and as a result, its
citizens have not benefitted economically, as might be expected.324
The Marange diamond fields of Zimbabwe stretch over 66,000 hectares and are rated as the
world’s largest discovery in the past twenty years.325 The diamonds, dubbed controversial,
were discovered around the early 1990s and were controlled by De Beers via their subsidiary
Kimberlitic Searches Limited.326 De Beers’ Exclusive Prospecting Order (EPO) expired in
2006 and extraction was opened to the public, a situation which led to a diamond rush,
attracting nearly 15,000 to 20,000 artisanal miners.327 The situation of lawlessness at the
318 Ibid. p. 72. 319 Ibid 320 Partnership Africa Canada (A), “Zimbabwe, Diamonds and the Wrong Side of History”, The Diamonds and Human Security Project, Occasional Paper No. 18, March 2009, p. 3. 321 Ibid 322 Ibid 323 Bloch, E. “Zim govt in state of paralysis”, Zimbabwe Independent, June 22 – June 28 2012, p. 12. 324 Ibid 325 Kabemba, C. “The Kimberley Process and the Chiadzwa Diamonds in Zimbabwe: Challenges and effectiveness” in Perspectives, Volume 3, No. 10. July 2010, p. 4. 326 New Zimbabwe, Zimbabwe and De Beers’ decline, http://www.newzimbabwe.com/opinion‐10729‐Zimbabwe+and+De+Beers+decline/opinion.aspx , Accessed: 19 July 2013. 327 Partnership Africa Canada (A): Op. Cit. p. 7.
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Marange diamond fields worsened, marking the beginning of diamond smuggling and trade
in conflict diamonds in the country.328
The newly-discovered diamonds were interpreted by the people of Zimbabwe as a panacea to
the economic troubles facing their country.329 It was generally believed that the billions of
dollars waiting to be gained from the vast diamond deposits were to be exploited in line with
the needs of the people of Zimbabwe, particularly improving their socio-economic
livelihoods. However, such has not been the case.330 The optimism once attached to the
discovery of Marange diamonds has since faded away, as there are no signs that diamond
wealth will be delivered through the system of the state any time soon.331 It has turned out to
be yet another case in which greed and politicking from politicians have prevented
development of this resource, while a sad story for the Marange villagers who claim to have
discovered the diamonds first, a finding they interpreted as godsend after years of serious
droughts and economic suffering.332
6.2. Marange Diamonds: The Politics of Domination or Illusion?
6.2.1. Allocation of Mining Concessions
Although international interest in the Marange diamonds is fast-growing, the allocation of
mining rights and ownership at Marange remains uncertain, a situation that prompts fears of
corruption, nepotism and tax evasion in the diamond sector, as has been seen prolifically
elsewhere.333 The allocation of mining rights in Marange is generally clouded by the
suspicion that stakeholders involved in the diamond trade are corrupt, a suspicion that gained
momentum after it became known that the mining company involved, Core Mining and
328 Human Rights Watch (A), Farai Maguwu, Zimbabwe, http://www.hrw.org/news/2012/08/13/farai‐maguwu‐zimbabwe, 13 August 2012. 329 Chimhete, C. “Mystery surrounds Zim’s gems revenue”, The Standard, August 26 – September 1, 2012, p. 7. 330 Aljazeera (A): Op. Cit. 331 Chimhete, C: Op. Cit p. 7. 332 Ibid 333 Moyo, J. (A) Murky world of Marange mining firms, Mail and Guardian (Africa), July 6 – 12 2012, Vol. 28, No. 27, p. 27.
58
Minerals, was awarded mining rights through providing false information regarding its
business partners.334
When the Marange diamonds were discovered in June 2006, African Consolidation
Resources (ACR), a United Kingdom registered company, intially had exclusive mining
rights (acquired legitimately from the Zimbabwe government) over the fields, but the
Zimbabwe government, through the use of police force, unlawfully expelled the mining
company from the Marange fields.335 Neither was there any form of legal explanation nor
transparency in the process leading to the expulsion.336 By granting the Zimbabwe Mining
Development Corporation (ZMDC) exclusive mining rights over the Marange fields, the then
minister of mines, Amos Midzi, was convinced that law and order was to be restored at the
diamond fields.337 However, failure of the ministry of mines to consult civil society hinted
that the situation at Marange was less likely to benefit the people of Zimbabwe than the few
elite.338
Currently, the mining companies operating in Marange are Anjin, Mbada Diamonds,
Marange Resources, Diamond Mining Corporation, and Zimbabwe-Ozgeo.339 These
companies are widely believed to be a front serving the interests of the military since their
diamond activities are not transparent as required by the K.P.340 The first company, Anjin, is
the biggest and the most controversial,341 occupying the largest area with about seven
shafts.342 Its operations and company profile remain anonymous, along with the amount of
money it owes the Zimbabwe government in taxes and royalties.343 The Kimberley Process
334 Mtisi, S., Dhliwayo, M, and Makore, G: Op. Cit. pp. 45‐46. 335 Human Rights Watch (B): Diamonds in the Rough: Human Rights Abuses in the Marange Diamond Fields, Human Rights Watch, New York, 2009, pp. 13‐14. 336 Ibid 337 Ibid. p. 13. 338 Ibid 339 Moyo, J. (A): Op. Cit. p. 27. 340 UN Office on Drugs and Crime: Op. Cit. p. 76. 341 Since its inception in 2010, Anjin has been at the centre of controversy, the mining company’s board of directors comprises of Zimbabwe serving and retired members of the military and the police. See, Tendai Marima, Chinese cream off US$200m, Zimbabwe Independent, June 22 to 28 2012, p. 2. 342 Marima, T. (A), Chinese cream off US$200m, Zimbabwe Independent, June 22 to 28 2012, p. 2. 343 Ibid
59
stated that Anjin has the capacity to mine roughly two million diamond carats, valued at
US$80 per carat, and worth US$160 million per month.344
The current Deputy Mines Minister, Gift Chimanikire, stated that 50% of Anjin is owned by
the Chinese, 40% by the Zimbabwe Defence Industries (ZDI), and the remainder by
ZMDC.345 According to Finance Minister Tendai Biti, the ZMDC has nothing to do with
Anjin. At the same time the ZDI chief executive, retired Colonel Tshinga Dube, has distanced
the ZDI from Anjin.346 Government ministers claim to be unaware of the amount of revenue
generated by Anjin, a situation which has led to speculation over the identity of the owners
and beneficiary of their activities in the Marange area.347 According to the Finance Minister,
Anjin is expected to pay 17% in royalties, 14% in corporate taxes (based on a net figure), 4%
non-resident shareholders, and value added tax (V.A.T.).348 In other words, the joint venture
partnership between the government of Zimbabwe and Anjin should see the government of
Zimbabwe receiving 50% of Anjin’s proceeds, plus taxes, at an estimate of US$200
million.349
Anjin is speculated to be owned by a Chinese firm, Anhui Foreign Economic Construction,
which has been partly responsible for the funding and building of the controversial
Zimbabwe National Defence College, worth US$98 million.350 Anhui’s partner is not known,
however, it is suspected to be Matt Bronze, a shelf company representing the military’s
investments interests.351 Since the directors of Matt Bronze are not publicly known either,
there are fears that proceeds from Marange might be benefitting individuals in the army
rather than population at large.352
The Finance Minister argues that since Anjin began its mining operations, government has
not received any form of revenue from the company. On the other hand, Anjin remains
344 Ibid 345 Moyo, J. (A): Op. Cit. p. 27. 346 Marima, T. (A): Op. Cit. p. 1. 347 Ibid. p. 2. 348 Ibid 349 Ibid 350 Moyo, J. (A): Op. Cit. p. 27. 351 Marima, T. (A): Op. Cit. p. 1. 352 Ibid
60
adamant that it has contributed US$30 million to the national fiscus.353 Anjin’s director,
Munyaradzi Machacha, repudiates the minister’s argument, saying his revenue expectations
are too high, as he overestimates the value of a single diamond carat at US$1,500, while its
actual value stands at only US$60.354
Second is the Mbada Diamonds Company, a joint venture between the ZMDC and several
other investors, such as South Africa’s Reclamation Group, and Old Mutual.355 A notable
shareholder at Mbada Diamonds is Robert Mhlanga, a former member of the army and
President Robert Mugabe’s personal pilot.356 Mhlanga is amongst the richest men in
Zimbabwe and has private properties both inside and outside of Zimbabwe including his
latest mansion located close to the Zambezi Golf Estate in Kwazulu-Natal, South Africa.357
The source of his wealth however remains unknown, although he claims to have bought his
properties before getting into the diamond business.358 What is known is that Mhlanga has
regional diamond interests, as witnessed by his involvement in the controversial diamonds of
Zimbabwe, Angola, and the D.R.C., among other regional diamond producing countries.359
Third is the Marange Resources Company, which was once a joint venture between ZMDC
and Canadile, however, with Candile’s partnership being revoked as a result of fraud and
corruption cases, the ZMDC has since retained sole ownership of the company at Marange.360
Lovemore Kurotwi of Canadile claims that the company pulled out of the partnership after
the Mines Minister, Obert Mpofu, demanded a bribe of US$10 million in return for a mining
licence.361 Marange Resources has since been operating independently, and has exported
diamonds worth US$11.7 million during the first quarter of the 2012.362
353 Moyo, J. (A): Op. Cit. p. 27. 354 Ibid 355 Ibid 356 Ibid 357 Ibid 358 Ibid 359 Ibid 360 Ibid 361 Ibid 362 Ibid
61
Fourth is the Diamond Mining Corporation (DMC) made up of the ZMDC and Pure Diam,
from Dubai.363 The shareholders of Pure Diam are anonymous, however what is known about
them is that during the first quarter of 2012, the mining company generated US$38.9
million.364
The fifth and last company is Zimbabwe-Ozgeo, made up of a partnership between the
government of Zimbabwe and investors from Russia.365 The Russians are yet to resume
mining operations in the eastern Chimanimani area.366 The relationship between the
government of Zimbabwe and Russia dates back to the Cold War era, when Russia was one
of the chief supplier of military helicopters in exchange for platinum concessions.367
Considering the track record of the two countries, it remains unclear whether the Russian
investors will remain committed to the K.P. norms of transparency and accountability.
After profiling all the diamond companies operating at Marange, it becomes clear that the
ZANU-PF political elite, the Zimbabwe Reserve Bank, the military, police, the Chinese and
Russian foreign investors, diamond smugglers and other unknown actors are the key social
forces driving the Zimbabwe diamond sector. These forces have maintained the secrecy of
the diamond sector through political domination and the use of police and military force, in
order to squash all form of regulation by non-state actors.
6.2.2. Military Control and Human Rights Issues
The extractive industry in Africa is generally characterized by the violation of civil and
political rights, in several aspects.368 Likewise, at the centre of the Zimbabwe diamond sector
are issues of human rights violation and the embezzlement of diamond revenues by the
political elite, but since human rights issues are considered to be outside the remit of the K.P.,
the case of Zimbabwe has left the diamond regime divided.369 Diamond mining and trade in
363 Ibid 364 Ibid 365 Ibid 366 Ibid 367 Ibid 368 Mtisi, S., Dhliwayo, M, and Makore, G: Op. Cit. p. 16. 369 Muleya, D. “Kimberley Process nab on Zimbabwe gems lifted”, Business Day, November 3, 2011.
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Zimbabwe is characterized by high levels of massive human rights abuse, corruption, and
smuggling, a situation which once led to the temporary exclusion of Zimbabwe from the K.P.
Certification Scheme.370
The Marange diamonds are considered a “special breed of conflict diamond”, mainly because
of the unusual type of conflict they have produced, that is, an abuse of human rights by the
legitimate government and not by rebel movements, as the case of the D.R.C. and Ivory
Coast.371 Research on Marange diamonds undertaken by Partnership Africa Canada, a leading
human rights NGO, concluded that the Zimbabwe diamonds are indeed ‘blood diamonds’,
even though the official definition by the K.P. fails to classify them as such.372 They have
also been labelled ‘unclean’ as a result of government’s military intervention in the diamond
fields, which left hundreds of artisanal miners dead.373 The Human Rights Watch report of
2009, gave evidence as to how President Robert Mugabe’s political party, Zimbabwe African
National Union-Patriotic Front (ZANU-PF), was contravening the United Nations Charter of
Human and People’s Rights through the use of children and adults as forced labour in the
mines at Marange.374
In November 2006, the Zimbabwe government resorted to a nationwide police operation
under the guise of curbing trade in conflict diamonds sourced from Marange.375 A 2010
report by Global Witness states that the police and the army were the leading culprits in
creating underground diamond syndicates, made up of illegal miners whom they controlled
and used as forced labour in extracting diamonds.376 Police intervention in Marange led to a
situation of lawlessness, human rights abuse, murder, torture, beatings, and harassment.377
370 The Diamonds and Human Security Project: Op. Cit. p. 2. 371 Mirell, H. Keeping Diamonds Kosher: Re‐evaluating the Kimberley Process Certification Scheme in the Wake of Zimbabwe’s Marange Diamonds Crisis, Centre on Democracy, Development and the Rule of Law Honours Thesis, 5 June 2012, p. 8. 372 Partnership Africa Canada (B), Diamonds and Clubs: Militarized Control of Diamonds and Power in Zimbabwe, Partnership Africa Canada, http://www.pacweb.org/Documents/diamonds_KP/Zimbabwe‐Diamonds_and_clubs‐eng‐June2010.pdf, Published: June 2010, p. 2. 373 Ibid 374 Human Rights Watch (B): Op. Cit. p. 3. 375 Ibid 376 Global Witness (C), Return of the Blood Diamond: The Deadly Race to Control Zimbabwe’s New‐Found Diamond Wealth, Global Witness, http://www.globalwitness.org/sites/default/files/pdfs/return_of_blood_diamond.pdf, Published: 14 June 2010, p. 6. 377 Human Rights Watch (B): Op. Cit. p. 3.
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The force used by the police reaction teams was excessive, with witnesses testifying that
some illegal miners were buried alive and some shot at point-blank range.378 About 1,600
artisanal miners were beaten, tortured and arbitrarily arrested; and such acts of abuse have
become common at the Marange fields.379
The army, on the other hand, played a leading role in unleashing a brutal military operation
dubbed “Operation Hakudzokwi” (You Will Not Return), which led to the death of about 200
defenceless artisanal miners.380 The military operation was meant to “ensure control of the
diamond deposits for the ZANU-PF elite, and to reward the army for its loyalty to this
clique”.381 Army brigades were rotated in Marange, giving each military unit the opportunity
to benefit from the diamond fields.382
It has been noted that vulnerable women, men and youths in the Marange village continue to
be abused by both the government and private companies, due to lack of knowledge and
resources to challenge non-constitutional actions.383 Also, the majority of citizens are too
afraid to stand up and defend their rights or hold the government and private companies to
account each time the government and private companies infringe on their rights hence the
need for the legislator to play a key role in defending citizen’s rights.384
Although the security issues in Marange are said to have subsided, the abuse of human rights
is still on-going, especially in areas such as Chiadzwa, Betera, Kusena, Chirasika, Mukwada,
among other areas.385 Apart from that, cases of massive violation of environment, economic,
social and cultural rights seem to have overshadowed investigations into issues of the abuse
of civil and political rights.386 The 2012 report released by the Human Rights Watch argues
that unlicensed miners continue to be abused by private security guards and the police
working at Marange, who use live ammunition, and have been reported to beat miners and to 378 Ibid 379 Ibid 380 Global Witness (C): Op. Cit. p. 6. 381 Ibid 382 Human Rights Watch (B): Op. Cit. p. 3. 383 Mtisi, S., Dhliwayo, M, and Makore, G: Op. Cit. p. 12. 384 Ibid 385 Ibid. p. 40. 386 Ibid
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set dogs on them.387 The Zimbabwean government, together with the K.P. provides a
different account, arguing that conditions in Marange are satisfactory such that diamonds
from these fields should be certified and allowed onto international diamond retail markets.388
The suspended workers at Anjin Investments confirmed cases of victimization by the Chinese
and the army.389 Anjin is renowned for abusing its workers, and it has been reported that in
2012 about 1,000 employees were suspended after they embarked on industrial action against
poor treatment by the company.390 The involvement by army personnel in workers’
grievances, according to the vice president of the workers committee, Tavengwa Sitima, is
the major problem as the generals seem only concerned about getting paid their allowance of
US$1,000 each time they visit the diamond company to resolve workers issues.391 Sitima
himself was dismissed at gunpoint by the army generals after being accused of inciting strikes
and violence at Anjin.392 The army generals involved in the abuse of workers’ rights include
Colonel Lindiwe Ngwenya (human resources management), Colonel Simeon Sambadzai
(power and equipment manager), Brigadier General Charles Tarumbwa (company secretary
and lawyer) and war veteran Munyaradzi Machacha (board member).393
Employees at Anjin are paid a salary below the minimum wage and discussions with the
company have since proved to be fruitless, as the Chinese and the army generals are reluctant
to raise worker’s salaries.394 Since 2010, workers have gone on strike eight times, but nothing
substantial has changed regarding their grievances.395
Again, the social forces responsible for the abuse of human rights in the Zimbabwe diamond
sector are identified as the ZANU-PF elite, the military and police force, and the Chinese
company owners. These actors take advantage of the lax implementation of the rule of law by
387 Human Rights Watch (C), World Report 2012: Zimbabwe, http://www.hrw.org/sites/default/files/related_material/zimbabwe_2012.pdf, Accessed: 9 June 2012. 388 Ibid. 389 Gombera, K, “Anjin workers feel victimised”, Daily News, 6 August 2012, p. 4. 390 Ibid 391 Ibid 392 Ibid 393 Ibid 394 Ibid 395 Ibid
65
the Zimbabwe government. Such a political environment allows both the government and the
owners of diamond mining companies to abuse mine workers, artisanal miners and the people
living around the mines.
6.2.3. Diamond Smuggling and Corruption
Zimbabwe’s Reserve Bank Governor, Gideon Gono, confirmed that the Zimbabwe
government has lost a significant amount of revenue due to diamond smuggling.396 Similar
cases of diamond smuggling during the period between 2006 and 2007 were also confirmed
by a number of South African dealers.397 In 2008, the Marange fields produced about 6
million carats, all of which were smuggled, leaving only those officially produced by the
ZMDC.398
Although the Human Rights Watch did not successfully manage to trace the global chain of
purchase of conflict diamonds from Marange, they discovered that most of the Marange
diamonds were being smuggled out of Zimbabwe via South Africa, Mozambique and the
Harare International Airport, to various destinations including Lebanon, the United Arab
Emirates, India, Pakistan, Europe and many others.399 In 2006, the majority of smuggled
diamonds from Zimbabwe were illegally certified in the DRC, then later exported to major
diamond centres.400
In September 2008, two Lebanese nationals were arrested at a hotel in Surat after being
caught in possession of uncertified diamonds worth 3,600 carats, smuggled from
Zimbabwe.401 The following month, a Zimbabwean woman was arrested by Dubai Customs,
after bags containing diamonds worth US$1.2 million were found wrapped around her
body.402 4000 carats of rough diamonds were returned to Zimbabwe in 2010 after smugglers
396 Ibid 397 Ibid 398 UN Office on Drugs and Crime: Op. Cit. p. 78. 399 Human Rights Watch (B): Op. Cit. pp. 14‐15. 400 UN Office on Drugs and Crime: Op. Cit. p. 77. 401 Ibid. p. 78. 402 Ibid
66
were caught in the United Arab Emirates.403 The following year in April 2011, two people
were arrested by the Indian Directorate of Revenue Intelligence for smuggling an estimated
9.72 KGs/48 663 carats of rough diamonds from the Marange fields.404 Apart from these
cases, the Gold and Diamond Office of Sierra Leone also confirmed the trading of smuggled
diamonds from Zimbabwe inside their country.405
The immediate buyers of the Marange diamonds are classified into two categories, one
category is made up of the so-called ‘agents’ or middlemen – who are mostly Zimbabweans –
whose duty is to buy diamonds straight from the illegal miners on behalf of their principal
buyers.406 The second group is made up of the principal buyers themselves. These are the
political elite, military police, and official patronage that then proceed to smuggle and sell the
diamonds to buyers outside Zimbabwe.407 Such a system has been able to thrive due to the
security forces deployed at Marange, most of them relatives of high-ranking officials, key
public officials, buyers and at times private sector actors.408 The diamond revenue from
Marange is distributed on the bases of political affiliation, hence members of the president’s
political party (ZANU-PF) and other close business associates continue to benefit from
Marange diamonds at the expense of the broader population of Zimbabwe.409
Obert Mpofu, the Minister of mines, has been involved in massive diamond trade corruption
in Zimbabwe.410 The minister is alleged to have embezzled US$2 billion worth of diamonds,
and in 2011, his ministry disclosed only US$103,9 million after 700 000 diamond carats were
exported.411 According to Zimbabwe’s Finance Minister, a mismatch between diamond
403 Kubatana.net. CRD calls on Mines Minister Obert Mpofu to resign. http://www.kubatana.net/html/archive/demgg/110427crd.asp?orgcode=civ003&year=2011&range_start=1, Published: June 2011. 404 Ibid 405 The Diamonds and Human Security Project: Op. Cit. p. 16. 406 Human Rights Watch (B): Op. Cit. p. 15. 407 Ibid 408 Mayisa, T. and Benkenstein, A. “Zimbabwe’s Marange Diamonds and the need for reform of the Kimberley Process” Policy Briefing, No. 43, SAIIA, 2012, p. 2. 409 Rapaport (B), Smuggling Charges Surface as Conference Starts, http://www.diamonds.net/News/NewsItem.aspx?ArticleID=41632&ArticleTitle=Rapaport%2BTradeWire%2BNovember%2B16%252c%2B2012, 16 November, 2012. 410 Guma, L., Zimbabwe: Biti Says Diamonds Exports and Revenues not tallying, http://allafrica.com/stories/201107280003.html, Published: 27 July 2011. 411 Ibid
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exports and revenues from Marange continues to exist.412 On the same note, the Minister of
Parastatals and State Enterprises, Gorden Moyo, maintains that the destination of revenues
from Marange remains a mystery.413 Farai Maguwu, a human rights activist who has been
paying close attention to the Marange diamonds, is adamant that Minister Mpofu, who is also
a top political ally of incumbent President Mugabe, should bear all the responsibility for the
scandals and corrupt activities underway in Zimbabwe’s diamond industry.414
The situation has intensified due to a total disregard of the rule of law, mainly by the political
elite, with a failure of responsibility by the K.P. to remain committed to its core obligations in
the country.415 The July 2009 visit by the Kimberley Process Review Mission Team in
Marange confirmed Zimbabwe’s non-compliance with KPCS minimum requirements.416 The
Review Team gave evidence on how the Zimbabwe government has been the leading
perpetrator in human rights abuse, diamond smuggling and weak internal control structures,
which permitted the smuggling of diamonds and other irregularities to take place.417 As of
June 2012, Global Witness published a report on the Marange diamonds, revealing how the
diamond revenue from Marange is being used to finance off-budget funding for the military
by Anjin.418
During the 2012 Zimbabwe Diamond Conference held in Victoria Falls, Zimbabwe, an
undisclosed non-governmental organization directly attacked the Zimbabwean government
for the on-going corruption at Marange diamonds.419 Also, Partnership Africa Canada (PAC)
is convinced that the Zimbabwe government has not done enough in implementing local
diamond regulatory systems to guard against corruption, and similar irregularities.420 It
412 Ibid 413 Muvundusi, J. Mineral proceeds used in running parallel government, http://www.dailynews.co.zw/newsarticle.aspx?q=b66b75df‐6149‐4152‐96fd‐e13b2fd34803, Accessed: 09 September, 2012. 414 Kubatana.net: Op. Cit. 415 Partnership Africa Canada (B): Op. Cit. p. 2. 416 Ibid. p.4. 417 Ibid 418 Global Witness (A): Op. Cit. p. 13. 419 National Jeweler, After Zimbabwe conference, separate views emerge, http://www.nationaljeweler.com/nj/diamonds/a/~29906‐After‐Zimbabwe‐conference‐separate‐views, Accessed: 15 November, 2012. 420 Rapaport (B): Op. Cit
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argues that diamonds from Marange continue to be at the centre of illegal activities, such as
smuggling, corruption and money laundering.421 This is corroborated by the continuous
arrests of illegal diamond dealers in Zimbabwe from several Africa countries.422
Keith Lapperman, a diamond consultant, revealed that in 2010 Zimbabwe lost about US$500
million to diamond theft and smuggling.423 This has resulted in the establishment of a sub-
industry of smuggled diamonds whose effects go beyond Zimbabwe’s borders to the global
diamond industry.424 The PAC continues to stress that such irregularities in the case of
Zimbabwe have demonstrated the need for the K.P. to abandon its lukewarm approach
towards Zimbabwe, as it compromises the efficiency of both the K.P. and indeed the diamond
supply chain as a whole.425 There is need for formal regularization of the diamond sector in
Zimbabwe if a reduction in diamond smuggling and related issues are to be reduced.426
6.3. Beneficiaries of the Zimbabwean Diamonds
Although all the mines at the Marange fields are in operation, producing gems worth billions
of dollars annually, little information is available regarding the destination of the revenue.427
What is known is that the bulk of the diamonds traded legally are exported to Belgium, China
and while illegal diamonds are smuggled via Mozambique, the DRC, and South Africa to the
United Arab Emirates, India, Lebanon and China.428 Minister Mpofu confirmed that
diamonds from Marange generate about US$2 billion annually, but the beneficiaries of the
diamonds and their revenue remains unknown. It is either the government, or “the faceless
shareholders who own the mines”.429 Zimbabwe diamonds are described as the cheapest on
the world market, making them more attractive, yet the people of Zimbabwe are yet to
financially benefit from them.430
421 Ibid 422 UN Office on Drugs and Crime: Op. Cit. p. 78. 423 Marima, T. (B) Calls to regulate diamond sales to plug leaks, graft, Zimbabwe Independent, June 22 – June 28 2012, p. 4. 424 Ibid 425 Rapaport (B): Op. Cit 426 Marima, T. (B): Op. Cit. p. 4. 427 Aljazeera (A): Op. Cit. 428 UN Office on Drugs and Crime: Op. Cit. pp. 76‐78. 429 Moyo, J. (A): Op. Cit. p. 27. 430 Marima, T. (B): Op. Cit. p. 4.
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Various actors and stakeholders have expressed their views on the issue of Marange
diamonds, trying to figure out and explain events transpiring at Marange.431 The idea that
diamond revenues are being used to safeguard ZANU-PF’s interests, maintaining Robert
Mugabe in power, has been gaining momentum since the past years, coming especially from
local and international non-governmental organisations.432 The Finance Minister has
constantly made it clear that diamond revenue is not reaching state coffers, a sign of thieving
and corruption by the Ministry of Mines.433 The minister stated:
We have got evidence of the quantities that are being mined, the
quantities that are being exported but nothing is coming to the fiscus
[…] all I know is that it is not coming to the treasury […] it is not
coming to us. That means someone is getting it. The person who is
getting it is not getting it legally. Therefore, he’s a thief, therefore
she’s a thief [sic].434
On the same not, Malvern Mudiwa, the community leader of the Marange area, confirmed the
lack of development in the Marange, despite millions of dollars being generated from within
this community’s ‘own backyard’. Mudiwa gave the following testimony regarding the
Marange diamonds:
So we thought now we are going to benefit from jobs, infrastructure,
we thought maybe our roads were going to improve, so that
generations and generations will benefit from this, not one individual.
But what is happening, honestly, honestly it’s a shame! [sic].435
The key issue in the Marange diamonds is the manner in which the Zimbabwe government is
abusing its power and authority by perpetuating the illicit diamond trade and the abuse of
human rights.436
431 Ibid 432 Ibid 433 Ibid 434 Ibid 435 Aljazeera (A): Op. Cit. 436 Koechlin, L., 2009. Zimbabwe and the Kimberley Process: Just how effective are Multi‐stakeholder Initiative?, Blog of the European Journal of International Law, http://www.ejiltalk.org/zimbabwe‐and‐the‐
70
Farai Maguwu, director of the Centre for Research and Development (CDR), is of the view
that the people of Zimbabwe are unlikely to benefit from the diamonds, since there is no
accountability regarding diamond revenue, and presently revenue has not been reaching state
coffers.437 Maguwu argues that sustainable development can only be achieved through the
guidance of the central government, however, as long as the destination of diamond revenue
remains unknown, development will not be realized.438
In 2012, the K.P. positioned Zimbabwe as the world’s seventh biggest producer of diamonds,
producing diamonds worth US$ 334 million in 2011, yet its population remain amongst the
poorest in the world, with 80% of its people living below the poverty datum line, suffering
extremely poor access to health, education and other social services.439
Zimbabwe exported diamonds worth US$11 billion to India in 2010, with the massive import
resulting in the establishment of a diamond cutting centre in Surat, creating 60 000 jobs, as
well as offices in Brussels and Belgium. These same diamonds have not benefited the people
of Zimbabwe, and have rather led to an increase in corruption and smuggling.440
Based on research conducted by the Human Rights Watch, the key beneficiaries of the
Marange diamond trade are the police and military, mainly because they have direct access to
the diamond fields.441 Global Witness, however, points to President Mugabe, his party and
supporters as the main beneficiaries of revenue from Marange.442 However, high levels of
secrecy surrounding the diamond sector in Zimbabwe make this impossible to verify.443 What
is known, however, is that the Reserve Bank of Zimbabwe benefits enormously from the
Marange diamond revenue.444 The Central Bank has been financing ZANU-PF’s political
kimberley‐process‐just‐how‐effective‐are‐multi‐stakeholder‐initiatives/#more‐1729, Published: 01 March 2009. 437 Chimhete, C: Op. Cit p. 7. 438 Ibid 439 Chimhete, C: Op. Cit p. 7. 440 Marima, T. (B): Op. Cit. p. 4. 441 Human Rights Watch (B): Op. Cit. p. 47. 442 Global Witness (C): Op. Cit. p. 3. 443 Human Rights Watch (B): Op. Cit. p. 47. 444 Ibid. pp. 14‐15.
71
activities in various cities, especially during election seasons. As such, the Human Rights
Watch concluded that the Reserve Bank of Zimbabwe and ZANU-PF are equally responsible
for the atrocities committed at the Marange fields.445
6.4. Kimberley Process’ response to Marange Diamonds
The case of Zimbabwe was brought to the attention of the K.P. in 2009 through a combined
effort of NGOs, industry representatives, and some governments.446 These actors unveiled the
killing of artisanal miners by the military and the smuggling and trading of conflict diamonds
in Marange.447 Initially, the Kimberley Process was reluctant to take action against
Zimbabwe, but continuous pressure applied particularly by the media, Global Witness,
Partnership Africa Canada and Human Rights Watch resulted in its intervention.448 K.P.
member states spent months debating the issue of Zimbabwe, with western countries calling
for Zimbabwe to be suspended, whereas fellow African countries were sympathizing with
Zimbabwe to remain part of the scheme.449
The major barrier to finding a solution to the Zimbabwean diamond issue were member states
who were arguing that the K.P. is not a human rights-oriented group and that as such, it
should not dwell on such matters, but focus on issues concerning rebel groups using diamond
funds to overthrow legitimate governments.450 Already, the flaws of the scheme were
beginning to emerge. Member states failed to reach any consensus and no binding resolution
could be adopted and implemented.
The decision to suspend Zimbabwe from the K.P. in 2009 was received with mixed feelings.
It was made after the inspection conducted by the K.P. Review Team at Marange, which
confirmed the non-compliance with K.P. minimum requirements at the diamond fields and
445 Ibid 446 The Diamonds and Human Security Project: Op. Cit. p. 19. 447 Ibid 448 Ibid. p. 2. 449 Ibid 450 Mtisi, S., Dhliwayo, M, and Makore, G: Op. Cit. p. 44.
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the violation of human rights.451 However, in the same year of 2009 in Namibia, the
Zimbabwean government, together with the K.P., agreed on a Joint Work Plan to ensure
compliance of the minimum standards by the Zimbabwe government.452 The Joint Work Plan
required scrutinizing and examination of diamonds from Marange prior to exportation
through the Supervised Export Mechanism, which was led by the K.P. Monitor, Abbey
Chikane, a South African and former Chair of the KPCS.453 The conditions of the Joint Work
Plan were that the Zimbabwe government was to de-militarize the diamond fields, identify
diamond resource areas, improve the security at Candile and Mbada mining operations, stop
smuggling through Mozambique through identifying more investors, and educate the local
community about the dangers of smuggling and the benefits of being a registered small-scale
miner in diamond mining operations.454
The pressure applied to the Zimbabwe government by the K.P. led to positive results, since
the government began to show commitment to the agreed Joint Work Plan, through reducing
military presence at the diamond fields.455 Zimbabwe’s adherence to the Joint Work Plan in
August 2010 led the K.P. to permit the country to conduct two diamond auctions in St.
Petersburg.456 In November 2010, the Zimbabwe issue was brought back to the K.P. during a
meeting held in Israel, but member states failed again to agree on a solution, whether
Zimbabwe was to be permitted to sell diamonds without supervision of the K.P. Monitors.457
The suspension, however, was later dropped in 2011 after Zimbabwe, according to the K.P.,
conformed to KPCS minimum requirements.458
NGOs keeping a close eye on the issue of Zimbabwe diamonds remain skeptical of the
capability of the K.P. in protecting the economic rights and social and cultural rights of the
451 Brilliant Earth, Diamond Smuggling From Zimbabwe Forces Acknowledgement of KP Failures, http://www.brilliantearth.com/news/diamond‐smuggling‐from‐zimbabwe‐forces‐acknowledgment‐of‐kp‐failures/, Accessed: 18 May 2010. 452 Mtisi, S., Dhliwayo, M, and Makore, G: Op. Cit. p. 44. 453 Ibid 454 Ibid 455 Ibid 456 Ibid 457 Ibid 458 Ibid
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villagers in Marange and Zimbabwe as a whole.459 The K.P. is failing to involve itself in
these issues because of its limited legal mandate.460 The case of Zimbabwe demonstrates
failure by the K.P. to give preference to the violation of human rights by the legitimate
government.461 Actors within the scheme, the K.P. Civil Society, have been pressing for the
urgent expansion of the definition of conflict diamonds, such that the violation of human
rights committed by state and non-state actors might fall under the same definition.462 It
remains doubtful whether the K.P. will ever reform their definition of conflict diamonds,
considering that the majority of its African member states are renowned for their human
rights violations. It is also a question as to whether it will ever pay attention to the continuous
violation of environmental rights, economic rights, and social and cultural rights of
communities located close to mining areas.463
Asked whether the decision by the Kimberley Process to certify Zimbabwean diamonds was
justifiable, the Programme Manager for Chiadzwa Community Development Trust, Melania
Chiponda, made it clear that the minimum requirements by the KPCS are in themselves not
adequate to putting an end to diamond smuggling in Zimbabwe. Such is the case because the
illegal activity of diamond smuggling still thrives through underground channels, and
therefore, there is need for more robust mechanisms and frequent reviews by the K.P.464 As
long as the government of Zimbabwe remains irresponsible with regards to its KPCS
obligations, it remains a challenge to uproot all forms of diamond trade irregularities.465 One
would argue that for the Kimberley Process to operate as it should, the scheme needs to
consider the level of good governance and institutional capacity before providing full
membership status to aspiring member states.
The Kimberley Process has visited Zimbabwe only three times since 2004, and there is need
for the scheme to adopt a more robust approach that keeps not only Zimbabwe but all
member states in line with KPCS norms and expectations, rather than relying on the
459 Ibid 460 Ibid 461 Ibid. pp. 44‐45. 462 Ibid. p. 45. 463 Ibid 464 Chiponda, M: Op. Cit. 465 Ibid
74
voluntary review system.466 The scheme ought to reconsider the current status of civil society
and NGOs and perhaps treat them as equal partners, rather than mere partners in the fight
against the trade in conflict diamonds.467 NGO’s have been finding it particularly difficult to
gain access to the diamond mining areas of Zimbabwe.468 According to Bieri, such a situation
is unacceptable, mainly because it is NGOs, especially in issues of natural resources and
conflict, that perform the duties of agenda setting, norm creation, and policing actors and
stakeholders involved in the diamond industry.469
During the diamond conflicts of Sierra Leone, Angola and the Democratic Republic of Congo
the wars took a long time to end, due to corrupt government officials who were benefitting
from the situation.470 It is believed that the entire diamond business in Marange is a complex
plot run by individuals who were once involved in the conflict diamonds of the D.R.C.,
Angola, and Sierra Leone. However, it is very difficult to trace and confirm such claims.471
Such being the case, if Zimbabwe is not given due attention, chances are high that the state
will be held ransom by the political elite at the expense of the entire country and top political
officials. Therefore, it is crucial that the Kimberley Process incorporates issues of human
rights and transparency, as advocated by NGOs.
466 Mirell, H: Op. Cit. p. 57. 467 Bieri, F.: Op. Cit. p. 10. 468 The Diamonds and Human Security Project: Op. Cit. p. 2. 469 Ibid 470 Tamm, I.J: Op. Cit p. 16. 471 Mtisi, S., Dhliwayo, M, and Makore, G: Op. Cit. pp. 45‐46.
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7.1. Diamond Mining in the Democratic Republic of Congo
Source: Extracted from the 2011 UNODC Report.472
472 UN Office on Drugs and Crime: Op. Cit. p. 71.
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7.1.1. Background
The Democratic Republic of Congo, known as the D.R.C., is located in the central region of
Africa and is made up of a population of 56 million people from 200 different ethnic
groups.473 It is endowed with a vast amount of natural wealth, including diamonds, uranium,
copper, timber and cobalt, yet it remains amongst the least developed countries in the
world.474 Out of all the minerals in the D.R.C., diamonds are the most valuable, as they are
the main source of export revenue and foreign currency earnings.475 Diamond discovery took
place in 1907 in Kasai Province, leading to the diamond rush, which saw the town of Mbuji-
Mayi becoming the diamond capital of the country in the 1920s.476
Soon after attaining independence from Belgium in 1960, the Congo477 experienced a brutal
civil war which led to the assassination of its first leader, Patrice Lumumba, among other
atrocities.478 Lumumba’s death is said to have been orchestrated by the United States’ Central
Intelligence Agency (CIA) together with General Joseph Mobutu, a rebel leader who later
ruled Zaire for 32 years.479
The coming to power of General Mobutu Sese Seko in 1965 saw the deepening and spread of
corruption in then Zaire, and later the influx of refugees from Rwanda during the 1994
Rwandan genocide, which destabilizes Eastern Congo to this day.480 Although Mobutu’s era
eventually came to an end in 1997, the new administration of the renamed country led by
President Laurent Kabila481 did very little in curbing corruption or the looting of minerals by
locals and outsiders, a situation which resulted in a full blown war.482
473 Even‐Zohar, C: Op. Cit. p. 337. 474 Dietrich, C. “Hard Currency: The Criminalised Diamond Economy of the Democratic Republic of the Congo and its Neighbours”, in The Diamonds and Human Security Project, Occasional Paper 4, June 2002, p. 1. 475 Even‐Zohar, C: Op. Cit. p. 337. 476 UN Office on Drugs and Crime: Op. Cit. p. 70. 477 As it was known at the time. 478 Cater, C: Op. Cit. p. 25. 479 Ibid 480 Tamm, I.J: Op. Cit. p. 12. 481 Laurent Kabila’s administration introduction of the new name, Democratic Republic of Congo. See: Tamm, I.J: Op. Cit. p. 12. 482 Tamm, I.J: Op. Cit. p. 12
77
While relative stability has returned in what is now called the D.R.C., failure to disarm rebel
groups has deprived the country in moving forward economically.483 Mark Duffield claims
that the violent conflict in the D.R.C., amongst other countries such as Angola and Sierra
Leone, is not a result of the short term absence of development, but rather of the interplay
between deeply-rooted factors of insecurity, underdevelopment and the effects of
globalisation.484 Grant Masterson shares a similar opinion, where he argues that the lack of
functional democratic, accountable and transparent governance in the D.R.C. is a result of
numerous factors, which include: the adoption of an incompetent Belgian system of
governance after colonial rule; failure by the first Republic to advance the development
agenda; Congolese nationalism; the patrimonial rule of the Mobutu era; the increase in the
rise of rebel groups; and the intervention of foreign military in the post-Mobutu era.485
Solutions, according to Duffield, can be devised by encouraging social research to focus on
the political and social relations between the elite and subordinate groups, external networks
and their economic base.486
7.2. Diamond Mining in the Democratic Republic of Congo
Prior to the establishment of the Kimberley Process in 2003, the bulk of diamonds from the
D.R.C. were exported via neighbouring countries, especially the Central African Republic
and the Republic of Congo.487 But with the introduction of the K.P. in 2003, most of the
diamonds from the D.R.C. are now exported to Belgium, India, Israel, South Africa and the
United Arab Emirates (UAE).488 The K.P. heralded some hope in the D.R.C. diamond
industry, which had not been monitored for decades.489
483 Cater, C: Op. Cit. p. 27. 484 Duffield, M, “Globalisation and War Economies: Promoting Order or the return of History?”, in Fletcher Forum of World Affairs, Vol. 23, No. 2, Fall 1999, pp. 25‐26. 485 Masterson, G.E.T: Governance Quality and Government Commitment to the NEPAD African Peer Review Mechanism, EISA, Johannesburg, 2004, p. 41. 486 Duffield, M: Op. Cit. p. 26. 487 UN Office on Drugs and Crime: Op. Cit. p. 76. 488 Ibid 489 Burbank, J., The Effect of the Kimberley Process on Governance, Corruption & Internal Conflict. Washington, The Fund for Peace, http://www.fundforpeace.org/web/images/stories/programs/kimberley_process‐burbank.pdf, Accessed: 01 October, 2012, p. 2.
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The UN Office of Drugs and Crime rates the D.R.C. diamond reserves as the largest reserves
the world over, reaching about 25% of the world total.490 The bulk of these diamonds are for
industrial purposes, and are artisanally mined, especially in the Kasai provinces and few other
areas in the Orientale province.491 The two major diamond companies in the DRC diamond
industry are Société Minière de Bakwanga (MIBA) and Sengamin.492 However, MIBA has
shut down most of its mining operations in most parts of the country since the advent of the
2008 global economic crisis.493 An exception is a number of semi-industrial diamond mines
still operative in Tshikapa.494
Prior to the establishment of the Kimberley Process in 2003, the bulk of diamonds from the
D.R.C. were exported via neighbouring countries, especially the Central African Republic
and the Republic of Congo.495 But with the introduction of the K.P. in 2003, most of the
diamonds from the D.R.C. are now exported to Belgium, India, Israel, South Africa and the
United Arab Emirates (UAE).496 The K.P. heralded some hope in the D.R.C. diamond
industry, which had not been monitored for decades.497
While considerable changes are said to have been made in the D.R.C. diamond sector, Global
Witness shares a different opinion, arguing that fundamental changes are still required if the
D.R.C. diamond sector is to successfully curb the trade in illegal diamonds.498 The case of the
D.R.C. is likened to the diamond cases of the Ivory Coast and the Central African Republic,
where the K.P. is struggling to influence member states to adopt the regulations agreed upon
in this forum.499
490 UN Office on Drugs and Crime: Op. Cit. p. 16. 491 Ibid 492 Partnership Africa Canada and Global Witness (B), The Key To Kimberley: Internal Diamond Controls, http://www.pacweb.org/Documents/diamonds_KP/key_to_Kimberley‐eng‐elect_Oct2004.pdf, Accessed: 16 September 2012, p. 8. 493 UN Office on Drugs and Crime: Op. Cit. p. 70. 494 Partnership Africa Canada and Global Witness (B): Op. Cit. p. 8. 495 UN Office on Drugs and Crime: Op. Cit. p. 76. 496 Ibid 497 Burbank, J: Op. Cit. p. 2. 498 Global Witness (D), Reforming the DRC Diamond Sector, Global Witness, http://www.ddiglobal.org/login/Upload/GW_RDRCDS_ENG[1].pdf, Published: June 2006, p. 2. 499 Burbank, J: Op. Cit. p. 2.
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Table 1: DRC mineral endowments by province
Source: Extracted from the UNODC 2011 Report.500
The bulk of the minerals in the D.R.C. are located in the Eastern region of the country, which
is a conflict-zone area, especially in the provinces of Katanga, West and East Kasai, Oriental,
and North and South Kivu.501 The majority of these minerals are labelled ‘conflict resources’
since they are used by rebels and state-actors in propelling conflict.502 Diamonds are found in
almost all the D.R.C. provinces, with the exception of Katanga, North Kivu and South
Kivu.503
The major difficulty facing the D.R.C. government is the task of coming up with effective
internal diamond control systems capable of regulating artisanal mining.504 This type of
mining requires close monitoring by the government, since it is practiced by a large number
of illegal miners.
500 UN Office on Drugs and Crime: Op. Cit. p. 47. 501 Partnership Africa Canada and Global Witness (B): Op. Cit. p. 8. 502 UN Office on Drugs and Crime: Op. Cit. p. 47. 503 Ibid 504 Partnership Africa Canada and Global Witness (B): Op. Cit. p. 8.
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7.2.1. Diamond Smuggling and the Trade in Conflict Diamonds
Diamond smuggling, the undervaluation of annual production and the trade in conflict
diamonds are some of the key challenges facing the D.R.C. diamond sector.505 Illegal
diamond dealers find it easy to trade illegal diamonds in the D.R.C.506 They trade them in
Kinshasa and Kisingani, where a number of legal diamond buying houses, known as the
‘legal comptoir system’, are located.507 Similar activities occur in the towns of Butembo and
Lubero, close to the Ugandan border.508 Lebanese and Israelis in the D.R.C. are the main
diamond buyers of both legal and illegal diamonds in Kinshasa, and because they offer higher
prices, artisanal miners prefer selling their diamonds to them.509 Above and beyond local
production, the D.R.C. has become the regional hub of smuggled diamonds from Angola, and
the Central African Republic (CAR).510
Fig. 3: Gross Value of Contraband Flows from the DRC in 2010
Source: Extracted from the UNODC 2011 Report.511
505 Even‐Zohar, C: Op. Cit. p. 337. 506 The Diamonds and Human Security Project: Op. Cit. p. 13. 507 Ibid 508 Ibid 509 Ibid 510 UN Office on Drugs and Crime: Op. Cit. p. 16. 511 Ibid. p. 13.
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A study conducted by the UNODC in 2011 shows that large quantities of minerals and other
natural resources are smuggled out of the DRC each year.512 Rated according to gross value,
diamonds are the fourth most smuggled mineral from the D.R.C., after gold, timber and
cassiterite.513 The D.R.C. loses approximately US$21 million to diamond smuggling
annually.514 Such a substantial amount of money could have been channelled towards the
rebuilding of the country.
Rwanda and Uganda are the two major regional gateways for D.R.C. conflict diamonds,
which are later exported to international diamond centres.515 Once the smuggled diamonds
reach Rwanda or Uganda, it becomes a challenge for the K.P. to trace them, since the two
countries are not members of the KPCS. The high levels of mineral smuggling in the D.R.C.
demonstrates how the central government has failed to implement effective monitoring
systems, and at the same time it indicates a failure by the K.P. to enforce more robust
diamond control systems in the D.R.C.
Only 60% of rough diamonds from the D.R.C. go accounted for by the K.P. each year, while
the rest, approximately 20-24 million carats, are smuggled out of the country.516 If the D.R.C.
government had an effective internal diamond control system, it could be receiving more than
its current diamond revenue. On the same note, the K.P. appears to be reluctant to take a
more forceful approach in the D.R.C. diamond sector. Considering the huge amount of
diamonds smuggled out of the D.R.C., assumptions are that elites in the country might be part
of the syndicate, due to the sophisticated nature of fraudulence required. Although diamond
smuggling is a concern in the D.R.C., the K.P. has been credited for introducing barriers that
have led to a reduction in the amount of smuggled diamonds to the neighbouring countries of
Uganda and Rwanda.517
512 Ibid 513 Ibid 514 Ibid 515 Ibid 516 Ibid 517 Burbank, J: Op. Cit. p. 2.
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The D.R.C. government undervalues diamond prices, and as a result, little tax revenue is
received by the state when diamonds are legally traded.518 The government imposes a total
diamond export tax of 3.75%, which is later divided between government departments and
producing regions.519 The country procures very little diamond export tax compared to other
diamond producing countries in the region, such as the Central African Republic (11.25%)
and Angola (11%).520 The D.R.C. diamond producing regions are expected to gain 1% of the
value of diamonds at the first point of sale, but very little revenue is returned to these
regions.521 Diamond valuation in the D.R.C. is a problem as a result of the government
employing valuators from ‘private comptoirs’, who are faced with a conflict of interests.522
The diamond industry in the D.R.C. is made up of both legal and illegal actors. The key
social forces driving the illegal trade in the D.R.C. are artisanal miners, illegal diamond
dealers, legal diamond buying houses, Lebanese and Israeli diamond buyers, Rwanda and
Uganda. The illegal trade begins with the artisanal miners, who extract the minerals illegally
and sell them to diamond buying houses in Kinshasa, Kisingani, Butembo and Lubero. In
Kinshasa, the diamonds are mostly sold to Lebanese and Israeli buyers, who are renowned for
paying high prices for the diamonds. Neighbouring Rwanda and Uganda make up part of the
D.R.C. illegal diamond trade, since they are the recipients of smuggled diamonds from the
D.R.C.
7.2.2. Rebel Groups and Artisanal Mining
Alluvial diamond mining is mostly artisanal in nature, driven by poverty and practised in
poorly developed areas, where the population is illiterate and faced with high levels of
unemployment.523 It thrives in areas where state regulatory and enforcement institutions are
dysfunctional, hence in most cases it is conducted illegally.524 Statistics reveal that more than
13 million people in 30 countries worldwide are artisanal miners and more than 80 million
518 Global Witness (D): Op. Cit. p. 2. 519 Ibid 520 Ibid 521 Ibid 522 Ibid 523 Goreux, L. “Conflict Diamonds” in Africa Region, Working Paper Series No. 13, 2001, p. 4. 524 Ibid
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people earn a living from mining precious stones, such as gold and diamonds.525 This
description fits the case of the D.R.C., where artisanal mining is practiced by a majority of
the poor and in areas of lawlessness.
During the Mobutu era in the 1970s, artisanal miners were permitted by the government to
work in diamond mines in an effort to reduce levels of unemployment.526 But lack of
government central control led to high levels of diamond smuggling and the emergence of
mini-fiefdoms and rebel movements, which took control of diamond fields in certain parts of
the country.527
Today, artisanal production of diamonds in the D.R.C. amounts to 75% of the total carat
production and 62.5% of the total value produced.528 It could be argued that the practice of
artisanal mining in the D.R.C. today emanated during the Mobutu years, and since then, local
people of diamond producing areas have adopted it as means of survival.
Years of armed conflict and instability in the D.R.C. paved the way for the emergence of
artisanal mining (informal small scale mining practice), which the contemporary D.R.C.
government is failing to systematically control and record.529 A majority of these miners are
illegal and the destination of their diamonds is not known, which deprives the state of
substantial mineral revenue in tax.530
The state’s largest diamond mining company, MIBA, suspended its mining operations in
Mbuji-Mayi, and although the diamond fields are guarded by the army, illegal miners
continue to bribe their way into the fields to extract alluvial diamonds.531 On the same note,
the government organisation responsible for regularizing artisanal miners and the diamond
525 Ibid 526 Even‐Zohar, C: Op. Cit. p. 341. 527 Ibid 528 UN Office on Drugs and Crime: Op. Cit. p. 70. 529 The Diamonds and Human Security Project: Op. Cit. p. 8. 530 Ibid 531 Global Witness (E), Stronger action needed by donors to help reform the DRC diamond sector, http://www.globalwitness.org/library/stronger‐action‐needed‐donors‐help‐reform‐drc‐diamond‐sector‐0, Published: 14 July, 2006.
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fields, Small Scale Mining Technical Assistance and Training Service (SAESSCAM), has
failed to control alluvial diamond activities and diamond diggers.532
The outbreak of armed conflict has considerably decreased in the D.R.C. since the 2002
peace accord, however, the Eastern region is still vulnerable to rebel attacks.533 The region is
politically unstable due to violence caused by militia groups, the M23, the CNDP534, the
FDLR535 and the national forces FARDC536.537 Most mine sites in the Eastern Congo are
controlled by armed groups, and their mineral interests have led them to perpetuate conflict
and instability to maintain control of the territory and its enormous mineral wealth.538 It is
estimated that the members of armed groups number between 6,500 and 13, 000, who are
involved in the ill-treatment of diamond diggers and the people of the Eastern Congo.539 The
political and economic environment in the D.R.C. is hostile to private mining operations;
while the government does not have total control over its territory, and is unable to provide
the public goods of peace and stability, security and development. Hence, it is at times
referred to as a failed state.540
The majority of rebel movements in diamond-producing regions originate politically, but
over time their agenda usually transforms into criminality.541 The case of the D.R.C.
demonstrates how rebel movements have now embarked on illicit trade in agricultural
produce, timber, elephant ivory and cannabis.542 Cases of organised attacks, looting, forced
labour, forced recruitment, describe but some of the predatory behaviour of these groups in
the Eastern Congo.543
532 Ibid 533 Weir, E.A, DR Congo: Local Communities on the Front Line, Refugees International, http://refugeesinternational.org/sites/default/files/042412_DRC_National_Paralysis%20letterhead.pdf, 24 April 2012, p. 1. 534 Congres National pour la Defense du Peuple. 535 Forces Democratiques de Liberation du Rwanda. 536 Forces Armees de la Republique Democratique du Congo. 537 UN Office on Drugs and Crime: Op. Cit. pp. 23‐24. 538 Ibid 539 Ibid. p. 13. 540 Even‐Zohar, C: Op. Cit. p. 340. 541 UN Office on Drugs and Crime: Op. Cit. p. 9. 542 Ibid 543 Weir, E.A: Op. Cit. p. 1.
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The D.R.C. President, Joseph Kabila, publicly admitted the syphoning of state resources by
criminal networks within the national army, FARDC.544 He also confirmed a conflict of
interest between the army’s constitutional security mandate and the exploitation of natural
resources.545 The clash has since led to “pervasive insubordination, competing chains of
command [and] failure to actively pursue armed groups”, resulting in the army abandoning its
mandate of civilian protection.546 The situation in the D.R.C. reveals a politics of domination
by army personnel and rebels groups as they use their political and military might to
embezzle state mineral resources.
The 2012 UN Security Council Report on the D.R.C. confirmed the involvement of Rwanda
in the Eastern Congo conflict.547 Paul Kagame’s government is supporting the M23 rebel
movement through provision of military and financial support.548 The rebels are taking
advantage of the weak state institutions in the Eastern region and the country as a whole.549
The participation of Rwanda in the D.R.C. mineral conflict shows the need for a better
approach by the K.P. in dealing with the issue of conflict diamonds, namely an approach that
guards against regional interference, especially in a member state that has weak internal
diamond controls.
It is argued that the D.R.C. government is reluctant to regulate artisanal miners because the
political elite are benefitting from the substantial amounts of high quality diamonds produced
by the illegal miners, especially in areas of Tshikapa and Kisangani.550 The mineral conflict
in the D.R.C. reflects a politics of domination by the military groups and corrupt national
forces, which are working together in advancing their economic interests, at the expense of
the Congolese people and of stability in the Eastern region.
544 UN Office on Drugs and Crime: Op. Cit. p. 24. 545 Ibid 546 Ibid 547 UN Security Council, UN Group of Experts Report on the Democratic Republic of Congo, http://www.un.org/ga/search/view_doc.asp?symbol=S/2012/843, 15 November 2012, p. 3. 548 Ibid 549 UN Office on Drugs and Crime: Op. Cit. p. 24. 550 UN Security Council: Op. Cit. p. 339.
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The social forces involved in artisanal mining are the illegal diamond diggers, rebel
movements and national forces. These actors control both the diamond mines and diamond
diggers. Rebel movements partly rely on the trade in conflict diamonds, whereas corrupt
military forces are interested in self-enrichment from the diamond mines.
7.2.3. Diamond Tracing and the Reliability of National Statistics
About 15 million carats of diamond exported annually from the DRC remain untraceable,
which gives an indication of how the D.R.C. government is failing to implement an efficient
diamond control system capable of monitoring the flow of diamonds within its borders.551
Major diamond mining operations are practised in the provinces of Kasai-Oriental, Kasai-
Occidental, Oriental, and Bandundu, while small scale diamond mining is practised in Bas-
Congo and the region around Kinshasa.552 Generally, diamond mining in the D.R.C. is a
common practice, hence the need for the government to create national structures capable of
tracing diamonds such that they do not end up funding wars, or become used in illegal money
laundering activities.
Fig. 4: Diamond (by value) Entering Licensed DRC Legal Diamond Buyers 2005-2008
Source: Extracted from the 2009 Diamonds and Human Security Project.553
551 The Diamonds and Human Security Project: Op. Cit. p. 11. 552 Even‐Zohar, C: Op. Cit. p. 340. 553 The Diamonds and Human Security Project: Op. Cit. p. 11.
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The Diamond and Human Security Project traced the destination of artisanal diamonds and
found that most of them are eventually sold in Kinshasa by artisanal miners.554 Compared to
other provinces, Kinshasa receives the highest amount of diamonds from artisanal miners.555
These diamonds, of unknown origin, are first recorded in the provinces of Kinshasa, Isiro,
Mbuji Mayi, Kisangani, Tshikapa and Tembo. Prior to that, no form of record is made, and
those who criticise the trade argue that such diamonds ought to be labelled as “origin
unknown”.556 Kinshasa is a favourable destination for most artisanal miners because of the
concentration there of diamond buyers who pay high prices for the stones. Due to this kind of
access to the market, there has been a decrease in the amount of diamonds smuggled out of
the D.R.C.
The D.R.C. government does not have statistical records for its diamond production, diamond
data is first captured when the gems are sold to the diamond buying house, or comptoir, in
several provinces.557 Any individual in possession of a diamond, be it an illegal miner or
digger, or creuseur, can easily exchange it for money from licensed middlemen, without
being required to disclose the origins of the gem.558 The authorities responsible for
purchasing diamonds do not make any effort to know the origins of diamonds or the
identification of the seller.559 Such negligence by the authorities promotes the trade in control
diamonds.560
554 Ibid 555 Ibid 556 Ibid. p. 12. 557 Ibid. p. 11. 558 Ibid 559 Ibid 560 Ibid
88
Fig. 5: Diamonds of Unknown Origin
(Percentage of total DRC production by value claimed to have originated in Kinshasa)
Source: Extracted from the 2009 Diamonds and Human Security Project.561
The origin of diamonds from the D.R.C. is very difficult to tell once the diamonds reach
major provinces where they are recorded for the first time.562 From 2005 to 2008, Kinshasa
has been identified as the source of almost 50% of all diamonds in the D.R.C.563 It is
interesting however, to note that Kinshasa is identified as the origin of diamonds, despite the
fact that no diamond mines are found in Kinshasa.564
Officials from the Ministry of Mines and the Centre for Evaluation, Expert Analysis and
Certification of Precious Minerals (CEEC) are obliged to monitor both the extraction and
trade of diamonds, verifying whether diamond diggers and traders have legitimate mining or
trading licences.565 However, this has not been the case in the D.R.C., where a lack of tight
national regulative mechanisms permits illicit traders such as Viktor Bout566 to freely trade
conflict diamonds for cash without difficulty.567 Lack of government regulation in the D.R.C.
perpetuates the trade in conflict diamonds, and as a result it entrenches the illegal diamond
561 The Diamonds and Human Security Project: Op. Cit. p. 12. 562 Ibid 563 Ibid 564 Ibid 565 Ibid 566 Viktor Bout is a well‐known arms dealer and sanctions‐buster, he was arrested in 2008 in Thailand through the assistance of the US Drug Enforcement Agency. See: The Diamonds and Human Security Project: Op. Cit. p. 12. 567 The Diamonds and Human Security Project: Op. Cit. p. 12.
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networks both at national and global level.568 Kinshasa International airport reportedly does
not even have standard security systems to detect diamond smuggling.569 It is because of such
loopholes, among others, that the trade in illicit diamonds thrives.
Table 2: DRC Diamond Exports, as recorded respectively by the K.P, the CEEC, and the
Ministry of Mines.
Source: Extracted from the 2009 Diamonds and Human Security Project.570
Table 3: Comparison of the various figures for DRC diamond exports: K.P vs. CEEC; K.P vs.
Ministry of Mines; CEEC vs. Ministry of Mines.
Source: Extracted from the 2009 Diamonds and Human Security Project.571
According to the statistics presented by the three actors, the difference between CEEC’s
figures and those presented to the K.P over six years amounts to 2.5 million carats, which is
about US$21 million dollars.572 From the period 2004-2008, an average of about half a
million carats per year appear on K.P.’s statistics, yet fails to appear on the CEEC
568 Ibid 569 Ibid 570 The Diamonds and Human Security Project: Op. Cit. p. 10. 571 The Diamonds and Human Security Project: Op. Cit. p. 10. 572 UN Office on Drugs and Crime: Op. Cit. p. 78.
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statistics.573 This effectively means that the CEEC is claiming that such amounts of diamonds
were never exported. Such discrepancies would seem to confirm systematic diamond
smuggling by actors who ought to be the custodian of the law.
When one further compares the K.P. figures to those of the Ministry of Mines, the difference
is even greater. National diamond records by the two D.R.C. leading diamond agencies, the
CEEC and the Mines, prove annul differences of over a million carats. If diamond statistics
generated by member states is to assist the K.P. in achieving a conflict-free diamond industry,
the D.R.C. diamond sector requires immediate attention. This is so because there are serious
discrepancies between the diamond statistics presented by the K.P., the CEEC, and the
Ministry of Mines.574 This is an indication of bad governance by the D.R.C. government and
also a lesson to the K.P. that good governance is a prerequisite for membership.
If no effort was made in tracing and verifying statistics presented by the three different
authorities, the statistical differences in Table 2 and 3 would not have been known. In an
ideal world, the table would be containing zeros throughout. Reliable statistics is one
important tool that can assist the K.P. to monitor the flow of diamonds, as such, there is need
to put pressure on the D.R.C. government to appoint local diamond agencies who would
operate within the requirements of the K.P.
7.3. Beneficiaries of the Democratic Republic of Congo Diamonds
During Laurent Kabila’s presidency, the D.R.C. diamonds were used in safeguarding the
political elite’s interests.575 Kabila received military support from regional countries
including Angola, Zimbabwe, Namibia, Chad and Sudan, in exchange for diamond
concessions.576 Today, the same diamonds have still not benefitted the people of the
573 The Diamonds and Human Security Project: Op. Cit. p. 10. 574 Ibid 575 Samset, I. “Conflict of interests or interests in conflict? Diamonds and War in the DRC” in Review of African Political Economy, Vol. 29, No. 93‐94, 2002, p. 474. 576 Ibid. pp. 472 – 476.
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D.R.C.577 The country exports about US$870 million worth of diamonds each year, but the
riches have not transformed into development, a sign of the resource curse.578
The diamonds have attracted foreign corporations, warlords, corrupt government officials and
foreign bandits, who have used the resources in causing conflict, especially in the Eastern
region.579 The resources have also divided the population, as ethnic groups continue to fight
over mineral control.580
The political elite in the D.R.C. advance their personal economic and political interests
through embezzling diamond wealth.581 They control diamond sites in almost all provinces
and as a result they have power over the illegal diggers and artisanal miners. Rebel
movements, on the other hand, partly rely on diamonds to fund their insurgencies.582 Political
elites and rebels alike use political domination and military might to control diamond mines
in the D.R.C.583 A considerable amount of diamonds are smuggled out of the country to
various destinations at the expense of the local people.584 As a result, the D.R.C. government
is deprived millions of dollars in gross domestic product.585 The lack of transparency and
accountability in the Congo permits rebels and corrupt officials to continue stealing state
resources.586
577 BBC, Question and Answer: DR Congo conflict, http://www.bbc.co.uk/news/world‐africa‐11108589, Accessed: 20 November 2012. 578 Global Witness (D): Op. Cit. p. 2. 579 BBC: Op. Cit. 580 Ibid. 581 Samset, I: Op. Cit. p. 469. 582 Ibid. 583 De Goede, M.J., The Price for Peace in the Congo: The Incorporation of the Political‐Economy of War in the State and Governance System, http://www.st‐andrews.ac.uk/intrel/media/Goede_criminalisation_of_politics_DRC.pdf, Accessed: 25 May, 2012, p. 10. 584Fisherman, J. L. “Is Diamond Smuggling Forever? The Kimberley Process Certification Scheme: The First Step down the Long Road to Solving the Blood Diamond Trade Problem” in University of Miami Business Law Review, Vol. 13, p. 220, 2005. 585 Ibid. 586 Voice of America, Congo’s Resources: Who Benefits? http://www.congoplanet.com/news/1667/congo‐resources‐who‐benefits‐mineral‐ressources‐coltan‐katanga‐conflict‐minerals.jsp, Published: 5 June 2010.
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7.4. Kimberley Process’ Response to the DRC diamonds
When the D.R.C. joined the Kimberley Process in 2003, it was full of vigour to implement
the minimum requirements of the scheme, and indeed a number of changes were made within
a short period of time.587 The government established many diamond buying-export houses
(comptoirs) across the country, in order to increase the level of diamond scrutiny as required
by the K.P.588 It also appointed the Centre for Evaluation, Expertise and Certificate (CEEC)
as the state agency responsible for evaluating and certifying diamonds, supervising diamond
houses (comptoirs) and monitoring the diamond export process.589
Unfortunately, many satellite offices that were set up in the five major diamond trading
centres closed down in 2008 as a result of the global economic recession.590 This resulted in
most of the rough diamonds being sent direct to Kinshasa.591 The K.P. has been encouraging
the D.R.C. government to establish a diamond monitoring program that observes and records
artisanal diamond mining activities across the country, but government has been slow in
response in generating a database of artisanal miners.592
Table 4: Kimberley Process Recommendations to the DRC Government
Major Recommendations Action Taken
All identification cards should be checked as their holders enter the office of the comptoirs to partake in a transaction,
None
587 PAC, Democratic Republic of Conhttps://docs.google.com/viewer?a=v&q=cache:jLZv4NQOtxUJ:www.pacweb.org/Documents/diamond_watch_list/DEMOCRATIC%2520REPUBLIC%2520OF%2520THE%2520CONGO.doc+actions+taken+by+the+DRC+governmnet+in+the+diamond+fields&hl=en&gl=za&pid=bl&srcid=ADGEEShMV73akSE79YEC1v‐bjfzRcLTNYFhH8gxVU_n‐DHZb2wYwvGIzazs55G6Usapz8MBl3egJyozzVgBkpL_jMQDRBFr_BjrR6fnLIdBJ3EeH8TvDVWtd_ANVGtZJpgFkKaLDakqu&sig=AHIEtbTjpyksQCJnK4EM_a5kYLnR8Mo17Q, 14 November, 2012, p. 1. 588 Ibid 589 UN Office on Drugs and Crime: Op. Cit. p. 75. 590 Ibid 591 Ibid 592 PAC: Op. Cit.
93
The monthly production reports from the provincial divisions of the Ministry of Mines should include information on the actual production sites, and link these - wherever possible - to the Cadastre minier. This would allow monitoring regular productions and flag any discrepancies that could indicate diamonds being smuggled in or out.
None
Sales slips (carnets d’achat) should indicate the precise origin of the diamonds, preferably through a cross-reference to the Cadastre minier.
None
DRC authorities should further extend the coverage of SAESSCAM, if necessary with the support of external donors.
None
All possible efforts should be undertaken to
ensure that the production of artisanal mines is
registered on a regular basis and communicated
to the central Ministry of Mines administration
and the CEEC.
None
Source: Extracted from the PAC’s 2008 Annual Review.593
The D.R.C. government has abandoned efforts to implement recommendations highlighted
by the K.P. Review Team.594 A program to register artisanal miners has since been put on
hold and the SAESSCAM, responsible for channelling artisanal miners into the formal sector
has also done very little.595 There has been a massive plunge in the diamond export values for
D.R.C. diamonds and tax revenues alike, yet world prices for rough diamonds has gone up.596
593 PAC: Op.Cit. p. 1. 594 Global Witness (E): Op. Cit. 595 PAC: Op. Cit. 596 Ibid
94
The major problem lies in the government’s failure to oversee and control its national
diamond chain. The exact amount of diamonds extracted in the D.R.C. remains unknown,
since record keeping of diamond production statistics only begins at the comptoirs.597
The government lacks political will and the capacity to monitor and regulate the flow of
diamonds, meaning that it cannot prevent the trade in conflict diamonds within its borders.598
Corinna Gilfillan of the Global Witness equally puts the blame on both the D.R.C.
government and donor governments who acknowledge acts of corruption within the diamond
sector, yet fail to take action to curb the illegal trade.599 Gilfillan emphasises the need for the
D.R.C. government to manage its natural resources responsibly, since they are so crucial to
the stability, peace and economic growth of the country.600
The majority of problems facing the D.R.C. government today emanated from the unresolved
underlying causes of the past civil wars, which were only in part resolved by fragile peace
agreements. The PAC argues that the D.R.C. government, together with the K.P. have both
adopted a complacent and indifferent approach towards the diamond problems in the
D.R.C.601 The Congolese authorities ought to go an extra mile in increasing government’s
control in the diamond fields and to putting in place diamond controls capable of curbing
alluvial diamond flows.
597 UN Office on Drugs and Crime: Op. Cit. p. 75. 598 Global Witness (D): Op. Cit. p. 2. 598 Burbank, J: Op. Cit. p. 2. 599 Global Witness (D): Op. Cit. 600 Ibid 601 Ibid
95
Chapter 7
Summary and Conclusions
8.1. Summary and Conclusions
The research presented here has examined the role played by the Kimberley Process in the
two case studies of Zimbabwe and the D.R.C. The individual case studies revealed the
different responses by the K.P. in its quest to establish a conflict-free diamond industry. The
current state of the global diamond industry indicates the way in which the Kimberley
Process has strived to improve the quality of global diamond trade from the late 1990s and
early 2000s, when the international community battled to control the diamond civil wars in
Angola and Sierra Leone. The research identified and credited the K.P. for its efforts in
cleaning up the diamond industry, through establishing diamond control mechanisms capable
of tracing the flow of rough diamonds from mines to the diamond retail markets. However,
the two case studies also revealed the major weaknesses and challenges still facing the K.P.
and the diamond industry.
8.2. Case Study Summaries
8.2.1. Zimbabwe
Although the Zimbabwean diamond sector is still faced with serious challenges, the role
played by the K.P. should be commended for the changes in the situation in Marange that
have resulted in improvements since beginning of the diamond crisis in 2006, when human
rights abuse and diamond smuggling was rife. Nonetheless, the diamond situation in Marange
still requires close surveillance by the K.P., as well as non-governmental organisations and
civil society organisations (CSOs), since Zimbabwean diamonds are still benefitting only
96
those in the military, political and business elite, as well as Chinese and Russian investors,
ZANU-PF supporters and other unknown actors.
In as much as the K.P. has gained a number of successes in the past, the case of Zimbabwe
has overshadowed these past successes. NGOs and civil society groups continue to put
pressure on the K.P. to take a more vigorous approach towards the Zimbabwean government.
The slow approach of the K.P. in denouncing human rights abuses has paved way for the
Zimbabwe government to continue abusing citizen’s rights. Apart from human rights issues,
the case of Zimbabwe has demonstrated how the scheme is neglecting social livelihoods of
the people in the Marange area, by failing to incorporate issues of environmental, socio-
economic and cultural rights within the scheme.
The Zimbabwean case study indicated the need for checks and balances to be instituted for
the political elite, since they can easily advance their own agenda, and as a result fail to
implement the K.P. requirements. The key issue in the Zimbabwe diamond sector is failure
by the government to create a transparent diamond tax collecting system. This has resulted in
diamond revenue from Marange becoming unaccounted for, and at the same time, the K.P
has not put enough pressure on the government to reveal the beneficiaries of the diamond
revenue. This demonstrates the relatively weak capacity of the K.P. There is a current need
for the K.P. to work together with regional and sub-regional supporting structures to boost
their operational capacity.
It is unfortunate that most African countries are governed by authoritarian leaders who run
their countries as private entities, and as a result, diamond wealth fails to trickle down to
benefit the masses. The Zimbabwean case study has revealed that without political
governance, member states are likely not to commit their resources in implementing the K.P.
requirements, but rather to advancing their own personal interests.
All in all, the report has found that the Marange diamonds are controlled by a minority
political elite and stakeholders whose intentions are to siphon diamond wealth away from the
97
proletariat in order to advance their personal interests at the expense of the Zimbabwean
people. The experience of Zimbabwe reveals the need to revamp the K.P. decision-making
processes, transparency and monitoring procedures.
8.2.2. The Democratic Republic of Congo
Soon after joining the K.P. in 2003, the D.R.C. government was under pressure to prove to
the international community that indeed, the years of civil war were gone. One way of
achieving this goal was to join the K.P. and to implement the KPCS minimum requirements.
The D.R.C. government initially performed well in transforming its diamond sector, which
had been controlled by rebel movements for the most of the war. However, the research
found that the D.R.C. government is currently battling to control the illegal diamond diggers,
artisanal miners, foreign illegal diamond buyers and smugglers. The K.P. is not doing enough
to insist that the D.R.C. government to improve its diamond sector.
The internal diamond control system in the D.R.C. has become dysfunctional, since it is no
longer capable of tracing the origin of local diamonds, nor can it prevent diamond smuggling
and the trade in conflict diamonds. The government has no influence over the mining of
alluvial diamonds, which explains why armed groups are able to control both the diamond
diggers and the diamond mines. This is also the reason why tracing the origins of D.R.C.
diamonds is a difficult exercise.
At national level, diamond revenue is not being exploited in advancing the development
agenda, but rather it is the political elite who are personally benefitting from the diamond
revenue. Global Witness recommends that the D.R.C. government implement the
recommendations made by the Kimberley Process since 2004.
The D.R.C. government is commended for becoming a member of the Kimberley Process and
the Extractive Industries Transparency Initiative (EITI), however, these initiatives can only
produces positive results when favourable conditions are put in place. It is important that the
98
government promotes transparency and certifies all minerals, such that rebel groups do not
continue relying on minerals to subsidize their activities. There is an urgent need to stabilize
the on-going conflict in the Eastern D.R.C., which has seen an escalated into lawlessness with
weak regional government infrastructure. To stop the insurgencies from spreading, the
government ought to deploy national forces to fight the rebellion and to establish a functional
and accessible criminal justice system in fighting crime. The research found that, without
stable political conditions in the D.R.C., the K.P. will not achieve its goal of filtering illegal
diamonds from the formal diamond trade.
8.3. Revisiting Theory
The Neo-gramscian theory, employed in this study, has successfully revealed that the two
countries of Zimbabwe and the D.R.C. are oppressive regimes characterised by an
unsustainable diamond political economy of a politics of domination, lack of consent
(between the government and the governed), and suppression of regime opposition. The
status quos in the two diamond producing countries is largely allowed to prevail due to
diamond production whose revenues are exploited by the ruling elite, political elite and the
business elite in maintaining a repressive system of governance. In short, the theory revealed
that lack of transparency and accountability in the two diamond sectors of Zimbabwe and the
D.R.C. continues to propel the current undesirable political economies of the two countries.
99
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1
KIMBERLEY PROCESS CERTIFICATION SCHEME
PREAMBLE PARTICIPANTS, RECOGNISING that the trade in conflict diamonds is a matter of serious international concern, which can be directly linked to the fuelling of armed conflict, the activities of rebel movements aimed at undermining or overthrowing legitimate governments, and the illicit traffic in, and proliferation of, armaments, especially small arms and light weapons; FURTHER RECOGNISING the devastating impact of conflicts fuelled by the trade in conflict diamonds on the peace, safety and security of people in affected countries and the systematic and gross human rights violations that have been perpetrated in such conflicts; NOTING the negative impact of such conflicts on regional stability and the obligations placed upon states by the United Nations Charter regarding the maintenance of international peace and security; BEARING IN MIND that urgent international action is imperative to prevent the problem of conflict diamonds from negatively affecting the trade in legitimate diamonds, which makes a critical contribution to the economies of many of the producing, processing, exporting and importing states, especially developing states; RECALLING all of the relevant resolutions of the United Nations Security Council under Chapter VII of the United Nations Charter, including the relevant provisions of Resolutions 1173 (1998), 1295 (2000), 1306 (2000), and 1343 (2001), and determined to contribute to and support the implementation of the measures provided for in these resolutions; HIGHLIGHTING the United Nations General Assembly Resolution 55/56 (2000) on the role of the trade in conflict diamonds in fuelling armed conflict, which called on the international community to give urgent and careful consideration to devising effective and pragmatic measures to address this problem; FURTHER HIGHLIGHTING the recommendation in United Nations General Assembly Resolution 55/56 that the international community develop detailed proposals for a simple and workable international certification scheme for rough diamonds based primarily on national certification schemes and on internationally agreed minimum standards; RECALLING that the Kimberley Process, which was established to find a solution to the international problem of conflict diamonds, was inclusive of concerned stake holders, namely producing, exporting and importing states, the diamond industry and civil society;
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CONVINCED that the opportunity for conflict diamonds to play a role in fuelling armed conflict can be seriously reduced by introducing a certification scheme for rough diamonds designed to exclude conflict diamonds from the legitimate trade; RECALLING that the Kimberley Process considered that an international certification scheme for rough diamonds, based on national laws and practices and meeting internationally agreed minimum standards, will be the most effective system by which the problem of conflict diamonds could be addressed; ACKNOWLEDGING the important initiatives already taken to address this problem, in particular by the governments of Angola, the Democratic Republic of Congo, Guinea and Sierra Leone and by other key producing, exporting and importing countries, as well as by the diamond industry, in particular by the World Diamond Council, and by civil society; WELCOMING voluntary self-regulation initiatives announced by the diamond industry and recognising that a system of such voluntary self-regulation contributes to ensuring an effective internal control system of rough diamonds based upon the international certification scheme for rough diamonds; RECOGNISING that an international certification scheme for rough diamonds will only be credible if all Participants have established internal systems of control designed to eliminate the presence of conflict diamonds in the chain of producing, exporting and importing rough diamonds within their own territories, while taking into account that differences in production methods and trading practices as well as differences in institutional controls thereof may require different approaches to meet minimum standards; FURTHER RECOGNISING that the international certification scheme for rough diamonds must be consistent with international law governing international trade; ACKNOWLEDGING that state sovereignty should be fully respected and the principles of equality, mutual benefits and consensus should be adhered to; RECOMMEND THE FOLLOWING PROVISIONS:
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SECTION I
Definitions For the purposes of the international certification scheme for rough diamonds (hereinafter referred to as “the Certification Scheme”) the following definitions apply: CONFLICT DIAMONDS means rough diamonds used by rebel movements or their allies to finance conflict aimed at undermining legitimate governments, as described in relevant United Nations Security Council (UNSC) resolutions insofar as they remain in effect, or in other similar UNSC resolutions which may be adopted in the future, and as understood and recognised in United Nations General Assembly (UNGA) Resolution 55/56, or in other similar UNGA resolutions which may be adopted in future; COUNTRY OF ORIGIN means the country where a shipment of rough diamonds has been mined or extracted; COUNTRY OF PROVENANCE means the last Participant from where a shipment of rough diamonds was exported, as recorded on import documentation; DIAMOND means a natural mineral consisting essentially of pure crystallised carbon in the isometric system, with a hardness on the Mohs (scratch) scale of 10, a specific gravity of approximately 3.52 and a refractive index of 2.42; EXPORT means the physical leaving/taking out of any part of the geographical territory of a Participant; EXPORTING AUTHORITY means the authority(ies) or body(ies) designated by a Participant from whose territory a shipment of rough diamonds is leaving, and which are authorised to validate the Kimberley Process Certificate; FREE TRADE ZONE means a part of the territory of a Participant where any goods introduced are generally regarded, insofar as import duties and taxes are concerned, as being outside the customs territory; IMPORT means the physical entering/bringing into any part of the geographical territory of a Participant; IMPORTING AUTHORITY means the authority(ies) or body(ies) designated by a Participant into whose territory a shipment of rough diamonds is imported to conduct all import formalities and particularly the verification of accompanying Kimberley Process Certificates; KIMBERLEY PROCESS CERTIFICATE means a forgery resistant document with a particular format which identifies a shipment of rough diamonds as being in compliance with the requirements of the Certification Scheme;
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OBSERVER means a representative of civil society, the diamond industry, international organisations and non-participating governments invited to take part in Plenary meetings; (Further consultations to be undertaken by the Chair.) PARCEL means one or more diamonds that are packed together and that are not individualised; PARCEL OF MIXED ORIGIN means a parcel that contains rough diamonds from two or more countries of origin, mixed together; PARTICIPANT means a state or a regional economic integration organisation for which the Certification Scheme is effective; (Further consultations to be undertaken by the Chair.) REGIONAL ECONOMIC INTEGRATION ORGANISATION means an organisation comprised of sovereign states that have transferred competence to that organisation in respect of matters governed by the Certification Scheme; ROUGH DIAMONDS means diamonds that are unworked or simply sawn, cleaved or bruted and fall under the Relevant Harmonised Commodity Description and Coding System 7102.10, 7102.21 and 7102.31; SHIPMENT means one or more parcels that are physically imported or exported; TRANSIT means the physical passage across the territory of a Participant or a non-Participant, with or without transhipment, warehousing or change in mode of transport, when such passage is only a portion of a complete journey beginning and terminating beyond the frontier of the Participant or non-Participant across whose territory a shipment passes;
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SECTION II
The Kimberley Process Certificate Each Participant should ensure that: (a) a Kimberley Process Certificate (hereafter referred to as the Certificate) accompanies each shipment of rough diamonds on export; (b) its processes for issuing Certificates meet the minimum standards of the Kimberley Process as set out in Section IV; (c) Certificates meet the minimum requirements set out in Annex I. As long as these requirements are met, Participants may at their discretion establish additional characteristics for their own Certificates, for example their form, additional data or security elements; (d) it notifies all other Participants through the Chair of the features of its Certificate as specified in Annex I, for purposes of validation.
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SECTION III Undertakings in respect of the international trade in rough diamonds Each Participant should: (a) with regard to shipments of rough diamonds exported to a Participant, require that each such shipment is accompanied by a duly validated Certificate;
(b) with regard to shipments of rough diamonds imported from a Participant:
• require a duly validated Certificate; • ensure that confirmation of receipt is sent expeditiously to the relevant
Exporting Authority. The confirmation should as a minimum refer to the Certificate number, the number of parcels, the carat weight and the details of the importer and exporter;
• require that the original of the Certificate be readily accessible for a period of no less than three years;
(c) ensure that no shipment of rough diamonds is imported from or exported to a non-Participant; (d) recognise that Participants through whose territory shipments transit are not required to meet the requirement of paragraphs (a) and (b) above, and of Section II (a) provided that the designated authorities of the Participant through whose territory a shipment passes, ensure that the shipment leaves its territory in an identical state as it entered its territory (i.e. unopened and not tampered with).
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SECTION IV
Internal Controls Undertakings by Participants Each Participant should: (a) establish a system of internal controls designed to eliminate the presence of
conflict diamonds from shipments of rough diamonds imported into and exported from its territory;
(b) designate an Importing and an Exporting Authority(ies); (c) ensure that rough diamonds are imported and exported in tamper resistant
containers; (d) as required, amend or enact appropriate laws or regulations to implement and
enforce the Certification Scheme and to maintain dissuasive and proportional penalties for transgressions;
(e) collect and maintain relevant official production, import and export data, and
collate and exchange such data in accordance with the provisions of Section V. (f) when establishing a system of internal controls, take into account, where
appropriate, the further options and recommendations for internal controls as elaborated in Annex II.
Principles of Industry Self-Regulation Participants understand that a voluntary system of industry self-regulation, as referred to in the Preamble of this Document, will provide for a system of warranties underpinned through verification by independent auditors of individual companies and supported by internal penalties set by industry, which will help to facilitate the full traceability of rough diamond transactions by government authorities.
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Section V Co-operation and Transparency
Participants should: (a) provide to each other through the Chair information identifying their designated
authorities or bodies responsible for implementing the provisions of this Certification Scheme. Each Participant should provide to other Participants through the Chair information, preferably in electronic format, on its relevant laws, regulations, rules, procedures and practices, and update that information as required. This should include a synopsis in English of the essential content of this information;
(b) compile and make available to all other Participants through the Chair statistical
data in line with the principles set out in Annex III; (c) exchange on a regular basis experiences and other relevant information, including
on self-assessment, in order to arrive at the best practice in given circumstances; (d) consider favourably requests from other Participants for assistance to improve the
functioning of the Certification Scheme within their territories; (e) inform another Participant through the Chair if it considers that the laws,
regulations, rules, procedures or practices of that other Participant do not ensure the absence of conflict diamonds in the exports of that other Participant;
(f) cooperate with other Participants to attempt to resolve problems which may arise
from unintentional circumstances and which could lead to non-fulfilment of the minimum requirements for the issuance or acceptance of the Certificates, and inform all other Participants of the essence of the problems encountered and of solutions found;
(g) encourage, through their relevant authorities, closer co-operation between law
enforcement agencies and between customs agencies of Participants.
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Section VI
Administrative Matters
MEETINGS 1. Participants and Observers are to meet in Plenary annually, and on other occasions
as Participants may deem necessary, in order to discuss the effectiveness of the Certification Scheme.
2. Participants should adopt Rules of Procedure for such meetings at the first Plenary
meeting. 3. Meetings are to be held in the country where the Chair is located, unless a
Participant or an international organisation offers to host a meeting and this offer has been accepted. The host country should facilitate entry formalities for those attending such meetings.
4. At the end of each Plenary meeting, a Chair would be elected to preside over all
Plenary meetings, ad hoc working groups and other subsidiary bodies, which might be formed until the conclusion of the next annual Plenary meeting.
5. Participants are to reach decisions by consensus. In the event that consensus
proves to be impossible, the Chair is to conduct consultations.
ADMINISTRATIVE SUPPORT 6. For the effective administration of the Certification Scheme, administrative
support will be necessary. The modalities and functions of that support should be discussed at the first Plenary meeting, following endorsement by the UN General Assembly.
7. Administrative support could include the following functions:
(a) to serve as a channel of communication, information sharing and consultation between the Participants with regard to matters provided for in this Document; (b) to maintain and make available for the use of all Participants a collection of those laws, regulations, rules, procedures, practices and statistics notified pursuant to Section V;
(c) to prepare documents and provide administrative support for Plenary and working group meetings; (d) to undertake such additional responsibilities as the Plenary meetings, or any working group delegated by Plenary meetings, may instruct.
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PARTICIPATION
8. Participation in the Certification Scheme is open on a global, non-discriminatory
basis to all Applicants willing and able to fulfill the requirements of that Scheme. 9. Any applicant wishing to participate in the Certification Scheme should signify its
interest by notifying the Chair through diplomatic channels. This notification should include the information set forth in paragraph (a) of Section V and be circulated to all Participants within one month.
10. Participants intend to invite representatives of civil society, the diamond industry,
non-participating governments and international organizations to participate in Plenary meetings as Observers.
PARTICIPANT MEASURES 11. Participants are to prepare, and make available to other Participants, in advance of
annual Plenary meetings of the Kimberley Process, information as stipulated in paragraph (a) of Section V outlining how the requirements of the Certification Scheme are being implemented within their respective jurisdictions.
12. The agenda of annual Plenary meetings is to include an item where information as
stipulated in paragraph (a) of Section V is reviewed and Participants can provide further details of their respective systems at the request of the Plenary.
13. Where further clarification is needed, Participants at Plenary meetings, upon
recommendation by the Chair, can identify and decide on additional verification measures to be undertaken. Such measures are to be implemented in accordance with applicable national and international law. These could include, but need not be limited to measures such as;
a. requesting additional information and clarification from Participants; b. review missions by other Participants or their representatives where
there are credible indications of significant non-compliance with the Certification Scheme.
14. Review missions are to be conducted in an analytical, expert and impartial manner
with the consent of the Participant concerned. The size, composition, terms of reference and time-frame of these missions should be based on the circumstances and be established by the Chair with the consent of the Participant concerned and in consultation with all Participants.
15. A report on the results of compliance verification measures is to be forwarded to
the Chair and to the Participant concerned within three weeks of completion of the mission. Any comments from that Participant as well as the report, are to be posted on the restricted access section of an official Certification Scheme website no later than three weeks after the submission of the report to the Participant concerned. Participants and Observers should make every effort to observe strict
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confidentiality regarding the issue and the discussions relating to any compliance matter.
COMPLIANCE AND DISPUTE PREVENTION 16. In the event that an issue regarding compliance by a Participant or any other issue
regarding the implementation of the Certification Scheme arises, any concerned Participant may so inform the Chair, who is to inform all Participants without delay about the said concern and enter into dialogue on how to address it. Participants and Observers should make every effort to observe strict confidentiality regarding the issue and the discussions relating to any compliance matter.
MODIFICATIONS 17. This document may be modified by consensus of the Participants. 18. Modifications may be proposed by any Participant. Such proposals should be sent
in writing to the Chair, at least ninety days before the next Plenary meeting, unless otherwise agreed.
19. The Chair is to circulate any proposed modification expeditiously to all
Participants and Observers and place it on the agenda of the next annual Plenary meeting.
REVIEW MECHANISM 20. Participants intend that the Certification Scheme should be subject to periodic
review, to allow Participants to conduct a thorough analysis of all elements contained in the scheme. The review should also include consideration of the continuing requirement for such a scheme, in view of the perception of the Participants, and of international organisations, in particular the United Nations, of the continued threat posed at that time by conflict diamonds. The first such review should take place no later than three years after the effective starting date of the Certification Scheme. The review meeting should normally coincide with the annual Plenary meeting, unless otherwise agreed.
THE START OF THE IMPLEMENTATION OF THE SCHEME 21. The Certification Scheme should be established at the Ministerial Meeting on the
Kimberley Process Certification Scheme for Rough Diamonds in Interlaken on 5 November 2002.
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22. ANNEX I
Certificates A. Minimum requirements for Certificates A Certificate is to meet the following minimum requirements: • Each Certificate should bear the title “Kimberley Process Certificate” and the
following statement: “The rough diamonds in this shipment have been handled in accordance with the provisions of the Kimberley Process Certification Scheme for rough diamonds”
• Country of origin for shipment of parcels of unmixed (i.e. from the same) origin • Certificates may be issued in any language, provided that an English translation is
incorporated • Unique numbering with the Alpha 2 country code, according to ISO 3166-1 • Tamper and forgery resistant • Date of issuance • Date of expiry • Issuing authority • Identification of exporter and importer • Carat weight/mass • Value in US$ • Number of parcels in shipment • Relevant Harmonised Commodity Description and Coding System • Validation of Certificate by the Exporting Authority B. Optional Certificate Elements A Certificate may include the following optional features: • Characteristics of a Certificate (for example as to form, additional data or security
elements) • Quality characteristics of the rough diamonds in the shipment • A recommended import confirmation part should have the following elements:
Country of destination Identification of importer Carat/weight and value in US$ Relevant Harmonised Commodity Description and Coding System Date of receipt by Importing Authority Authentication by Importing Authority
C. Optional Procedures Rough diamonds may be shipped in transparent security bags. The unique Certificate number may be replicated on the container.
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Annex II
Recommendations as provided for in Section IV, paragraph (f) General Recommendations 1. Participants may appoint an official coordinator(s) to deal with the
implementation of the Certification Scheme. 2. Participants may consider the utility of complementing and/or enhancing the
collection and publication of the statistics identified in Annex III based on the contents of Kimberley Process Certificates.
3. Participants are encouraged to maintain the information and data required by
Section V on a computerised database. 4. Participants are encouraged to transmit and receive electronic messages in order to
support the Certification Scheme. 5. Participants that produce diamonds and that have rebel groups suspected of
mining diamonds within their territories are encouraged to identify the areas of rebel diamond mining activity and provide this information to all other Participants. This information should be updated on a regular basis.
6. Participants are encouraged to make known the names of individuals or
companies convicted of activities relevant to the purposes of the Certification Scheme to all other Participants through the Chair.
7. Participants are encouraged to ensure that all cash purchases of rough diamonds
are routed through official banking channels, supported by verifiable documentation.
8. Participants that produce diamonds should analyse their diamond production
under the following headings: • Characteristics of diamonds produced • Actual production
Recommendations for Control over Diamond Mines 9. Participants are encouraged to ensure that all diamond mines are licensed and to
allow only those mines so licensed to mine diamonds. 10. Participants are encouraged to ensure that prospecting and mining companies
maintain effective security standards to ensure that conflict diamonds do not contaminate legitimate production.
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Recommendations for Participants with Small-scale Diamond Mining 11. All artisinal and informal diamond miners should be licensed and only those
persons so licensed should be allowed to mine diamonds. 12. Licensing records should contain the following minimum information: name,
address, nationality and/or residence status and the area of authorised diamond mining activity.
Recommendations for Rough Diamond Buyers, Sellers and Exporters 13. All diamond buyers, sellers, exporters, agents and courier companies involved in
carrying rough diamonds should be registered and licensed by each Participant’s relevant authorities.
14. Licensing records should contain the following minimum information: name,
address and nationality and/or residence status. 15. All rough diamond buyers, sellers and exporters should be required by law to keep
for a period of five years daily buying, selling or exporting records listing the names of buying or selling clients, their license number and the amount and value of diamonds sold, exported or purchased.
16. The information in paragraph 14 above should be entered into a computerised
database, to facilitate the presentation of detailed information relating to the activities of individual rough diamond buyers and sellers.
Recommendations for Export Processes 17. A exporter should submit a rough diamond shipment to the relevant Exporting
Authority. 18. The Exporting Authority is encouraged, prior to validating a Certificate, to require
an exporter to provide a declaration that the rough diamonds being exported are not conflict diamonds.
19. Rough diamonds should be sealed in a tamper proof container together with the
Certificate or a duly authenticated copy. The Exporting Authority should then transmit a detailed e-mail message to the relevant Importing Authority containing information on the carat weight, value, country of origin or provenance, importer and the serial number of the Certificate.
20. The Exporting Authority should record all details of rough diamond shipments on
a computerised database. Recommendations for Import Processes 21. The Importing Authority should receive an e-mail message either before or upon
arrival of a rough diamond shipment. The message should contain details such as
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the carat weight, value, country of origin or provenance, exporter and the serial number of the Certificate.
22. The Importing Authority should inspect the shipment of rough diamonds to verify
that the seals and the container have not been tampered with and that the export was performed in accordance with the Certification Scheme.
23. The Importing Authority should open and inspect the contents of the shipment to
verify the details declared on the Certificate. 24. Where applicable and when requested, the Importing Authority should send the
return slip or import confirmation coupon to the relevant Exporting Authority. 25. The Importing Authority should record all details of rough diamond shipments on
a computerised database. Recommendations on Shipments to and from Free Trade Zones 26. Shipments of rough diamonds to and from free trade zones should be processed by
the designated authorities.
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Annex III
Statistics Recognising that reliable and comparable data on the production and the international trade in rough diamonds are an essential tool for the effective implementation of the Certification Scheme, and particularly for identifying any irregularities or anomalies which could indicate that conflict diamonds are entering the legitimate trade, Participants strongly support the following principles, taking into account the need to protect commercially sensitive information: (a) to keep and publish within two months of the reference period and in a standardised format, quarterly aggregate statistics on rough diamond exports and imports, as well as the numbers of certificates validated for export, and of imported shipments accompanied by Certificates; (b) to keep and publish statistics on exports and imports, by origin and provenance wherever possible; by carat weight and value; and under the relevant Harmonised Commodity Description and Coding System (HS) classifications 7102.10; 7102.21; 7102.31; (c) to keep and publish on a semi-annual basis and within two months of the reference period statistics on rough diamond production by carat weight and by value. In the event that a Participant is unable to publish these statistics it should notify the Chair immediately; (d) to collect and publish these statistics by relying in the first instance on existing national processes and methodologies; (e) to make these statistics available to an intergovernmental body or to another appropriate mechanism identified by the Participants for (1) compilation and publication on a quarterly basis in respect of exports and imports, and (2) on a semi-annual basis in respect of production. These statistics are to be made available for analysis by interested parties and by the Participants, individually or collectively, according to such terms of reference as may be established by the Participants; (f) to consider statistical information pertaining to the international trade in and production of rough diamonds at annual Plenary meetings, with a view to addressing related issues, and to supporting effective implementation of the Certification Scheme.